Accounting Principles 12th Edition Weygandt Solution Manual

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CHAPTER 2
LEARNING OBJECTIVES

1. DESCRIBE HOW ACCOUNTS, DEBITS, AND CREDITS
ARE USED TO RECORD BUSINESS TRANSACTIONS.
2. INDICATE HOW A JOURNAL IS USED IN THE
RECORDING PROCESS.
3. EXPLAIN HOW A LEDGER AND POSTING HELP IN
THE RECORDING PROCESS.
4. PREPARE A TRIAL BALANCE.

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CHAPTER REVIEW
The Account
1.

(L.O. 1) An account is an individual accounting record of increases and decreases in a specific
asset, liability, or owner’s equity item.

2.

In its simplest form, an account consists of (a) the title of the account, (b) a left or debit side, and
(c) a right or credit side. The alignment of these parts resembles the letter T, and therefore the
account form is called a T-account.

Debits and Credits
3.

The terms debit and credit mean left and right, respectively.
a. The act of entering an amount on the left side of an account is called debiting the account
and making an entry on the right side is crediting the account.
b. When the debit amounts exceed the credits, an account has a debit balance; when the
reverse is true, the account has a credit balance.

4.

In a double-entry system, equal debits and credits are made in the accounts for each transaction.
Thus, the total debits will always equal the total credits.

5.

The effects of debits and credits on assets and liabilities and the normal balances are:
Accounts
Assets
Liabilities

Debits
Increase
Decrease

Credits
Decrease
Increase

Normal Balance
Debit
Credit

6.

Accounts are kept for each of the four subdivisions of owner’s equity: capital, drawings, revenues,
and expenses.

7.

The effects of debits and credits on the owner’s equity accounts and the normal balances are:
Accounts
Owner’s Capital
Owner’s Drawings
Revenues
Expenses

8.

Debits
Decrease
Increase
Decrease
Increase

Credits
Increase
Decrease
Increase
Decrease

Normal Balance
Credit
Debit
Credit
Debit

The expanded accounting equation is:
Assets = Liabilities + Owner’s Capital – Owner’s Drawings + Revenues – Expenses

The Journal
9.

(L.O. 2) The basic steps in the recording process are:
a. Analyze each transaction for its effect on the accounts.
b. Enter the transaction information in a journal.
c. Transfer the journal information to the appropriate accounts in the ledger.

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10.

Transactions are initially recorded in a journal.
a. A journal is referred to as a book of original entry.
b. A general journal is the most basic form of journal.

11.

The journal makes several significant contributions to the recording process:
a. It discloses in one place the complete effect of a transaction.
b. It provides a chronological record of transactions.
c. It helps to prevent or locate errors because the debit and credit amounts for each entry can
be easily compared.

12.

Entering transaction data in the journal is known as journalizing. When three or more accounts
are required in one journal entry, the entry is known as a compound entry.

The Ledger
13.

(L.O. 3) The ledger is the entire group of accounts maintained by a company. It keeps in one
place all the information about changes in account balances and it is a source of useful data for
management.

14.

The standard form of a ledger account has three columns and the balance in the account is
determined after each transaction.

15.

Posting is the procedure of transferring journal entries to the ledger accounts. The following steps
are used in posting:
a. In the ledger, enter in the appropriate columns of the account(s) debited the date, journal
page, and debit amount.
b. In the reference column of the journal, write the account number to which the debit amount
was posted.
c. Perform the same steps in a. and b. for the credit amount.

The Chart of Accounts
16.

A chart of accounts is a listing of the accounts and the account numbers which identify their
location in the ledger. The numbering system usually starts with the balance sheet accounts and
follows with the income statement accounts.

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The Basic Steps
17.

The basic steps in the recording process are illustrated as follows:
Transaction

On September 4, Fesmire Inc. pays $3,000 cash to a creditor in full payment of
the balance due.

Basic analysis

The liability Accounts Payable is decreased $3,000, and the asset Cash is
decreased $3,000.

Debit-credit
analysis

Debits decrease liabilities: debit Accounts Payable $3,000.
Credits decrease assets: credit Cash $3,000.

The Trial Balance
18.

(L.O. 4) A trial balance is a list of accounts and their balances at a given time. The trial balance
proves the mathematical equality of debits and credits after posting.

19.

A trial balance does not prove that the company has recorded all transactions or that the ledger is
correct because the trial balance may balance even when
a. a transaction is not journalized.
b. a correct journal entry is not posted.
c. a journal entry is posted twice.
d. incorrect accounts are used in journalizing or posting.
e. offsetting errors are made in recording the amount of a transaction.

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LECTURE OUTLINE
A.

The Account.
An account is an individual accounting record of increases and decreases in
a specific asset, liability, or owner’s equity item.
An account consists of three parts:
1. A title.
2. A left or debit side.
3. A right or credit side.

B.

Debits and Credits.
The terms debit and credit are directional signals: Debit indicates left, and credit
indicates right.
1. Assets, drawings, and expenses are increased by debits and decreased
by credits.

2. Liabilities, owner’s capital, and revenues are increased by credits and
decreased by debits.

C.

Steps in the Recording Process.
There are three basic steps in the recording process:
1. Analyze each transaction for its effects on the accounts.
2. Enter the transaction information in a journal.

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3. Transfer the journal information to the appropriate accounts in the ledger.

D.

The General Journal/Journalizing.
Entering transaction data in the general journal is called journalizing.
The general journal:
1. Discloses in one place the complete effects of a transaction.
2. Provides a chronological record of transactions.
3. Helps to prevent or locate errors because the debit and credit amounts
for each entry can be easily compared.
4. A simple journal entry involves only two accounts (one debit and one credit)
whereas a compound journal entry involves three or more accounts.

E.

The Ledger.
The ledger is the entire group of accounts maintained by a company. A general ledger contains all the assets, liabilities, and owner’s equity accounts.
1. The ledger provides the balance in each of the accounts as well as
keeps track of changes in these balances.
2. Companies arrange the ledger in the sequence in which they present
the accounts in the financial statements, beginning with the balance sheet
accounts.

F.

Posting/Chart of Accounts.
1. Posting is transferring journal entries to the ledger accounts.
2. Posting involves the following steps:

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a.

In the ledger, in the appropriate columns of the account(s) debited,
enter the date, journal page, and debit amount shown in the journal.

b.

In the reference column of the journal, write the account number to
which the debit amount was posted.

c.

In the ledger, in the appropriate columns of the account(s) credited,
enter the date, journal page, and credit amount shown in the journal.

d.

In the reference column of the journal, write the account number to
which the credit amount was posted.

3. A chart of accounts lists the accounts and the account numbers that
identify their location in the ledger. Accounts are usually numbered starting
with the balance sheet accounts followed by income statement accounts.

G.

Trial Balance.
A trial balance is a list of accounts and their balances at a given time.
1. It proves the mathematical equity of debits and credits after posting.
2. It may also uncover errors in journalizing and posting.
3. It is useful the preparation of financial statements.

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INVESTOR INSIGHT
Bank regulators fined Bank One Corporation (Now Chase) $1.8 million because
they felt the reliability of the bank’s accounting system caused it to violate
regulatory requirements. The financial records of Waste Management Inc. were
in such disarray that 10,000 employees were receiving pay slips that were in
error.
In order for these companies to prepare and issue financial statements, their
accounting equations must have been in balance at year-end. How could these
errors or misstatements have occurred?
Answer: A company’s accounting equation (its books) can be in balance yet its
financial statements have errors or misstatements because of the
following: entire transactions were not recorded, transactions were
recorded at wrong amounts; transactions were recorded in the wrong
accounts; transactions were recorded in the wrong accounting period.
Audits of financial statements uncover some, but not all, errors or
misstatements.

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IFRS
A Look At IFRS
International companies use the same set of procedures and records to keep track of
transaction data. Thus, the material in Chapter 2 dealing with the account, general rules
of debit and credit, and steps in the recording process—the journal, ledger, and chart of
accounts—is the same under both GAAP and IFRS.

KEY POINTS
Following are the key similarities and differences between GAAP and IFRS as related to the
recording process:


Transaction analysis is the same under IFRS and GAAP.



Both the IASB and FASB go beyond the basic definitions provided in the textbook for
the key elements of financial statements, that is, assets, liabilities, equity, revenue, and
expenses.



A trial balance under IFRS follows the same format as shown in the textbook.



As shown in the textbook, dollar signs are typically used only in the trial balance and the
financial statements. The same practice is followed under IFRS, using the currency of
the country where the reporting company is headquartered.



A trial balance under IFRS follows the same format as shown in the textbook.



IFRS relies less on historical cost and more on fair value than do FASB standards.



Internal controls are a system of checks and balances designed to prevent and detect
fraud and errors. While most public U. S. companies have these systems in place, many
non-U.S. companies have never completely documented the controls nor had an
independent auditor attest to their effectiveness.

LOOKING TO THE FUTURE
The basic recording process shown in this textbook is followed by companies across the globe.
It is unlikely to change in the future. The definitional structure of assets, liabilities, equity,
revenues, and expenses may change over time as the IASB and FASB evaluate their overall
conceptual framework for establishing accounting standards.

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20 MINUTE QUIZ
Circle the correct answer.
True/False
1.

Assets are increased by debits and liabilities are decreased by credits.
True

2.

The owner’s capital account is increased by credits.
True

3.

False

When the columns of the trial balance equal each other, it proves no errors occurred in
recording and posting.
True

10.

False

In posting, one should enter “J2” in the Post. Ref. Column on page two of the journal.
True

9.

False

Assets = liabilities + owner’s capital – drawings + revenues – expenses is a correct form
of the expanded basic accounting equation.
True

8.

False

Transferring journal entries to the ledger accounts is called posting and should be performed in chronological order.
True

7.

False

The basic steps in the recording process are (1) to analyze each transaction, (2) to enter
the transaction in a journal, and (3) to transfer the journal entry to the appropriate ledger
accounts.
True

6.

False

The ledger is the entire group of accounts maintained by a company.
True

5.

False

An account will have a credit balance if the total debit amounts exceed the total credit
amounts.
True

4.

False

False

The double-entry system helps ensure the accuracy of the recorded amounts and helps to
detect errors.
True

False

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Multiple Choice
1.

Transactions are initially recorded in the
a. general ledger.
b. general journal.
c. trial balance.
d. balance sheet.

2.

The right side of an account is referred to as the
a. footing.
b. chart side.
c. debit side.
d. credit side.

3.

A purchase of equipment for cash requires a credit to
a. Equipment.
b. Cash.
c. Accounts Payable.
d. Owner’s Capital.

4.

The equality of the accounting equation can be proven by preparing a
a. trial balance.
b. journal.
c. general ledger.
d. T-account.

5.

Which of the following accounts would be increased with a debit?
a. Rent Payable
b. Owner’s Capital
c. Service Revenue
d. Owner’s Drawings

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ANSWERS TO QUIZ
True/False
1.
2.
3.
4.
5.

False
True
False
True
True

6.
7.
8.
9.
10.

True
True
False
False
True

Multiple Choice
1.
2.
3.
4.
5.

b.
d.
b.
a.
d.

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CHAPTER 2
SOLUTIONS TO PROBLEMS: SET B

PROBLEM 2-1B
Date
Apr. 1

4

8

11

Account Titles and Explanation
Cash .......................................................
Owner’s Capital .............................
(Owner’s investment of cash
in business)

Ref.

Debit
35,000

35,000

Land .......................................................
Cash ...............................................
(Purchased land for cash)

27,000

Advertising Expense .............................
Accounts Payable .........................
(Incurred advertising
expense on account)

1,800

Salaries and Wages Expense ...............
Cash ...............................................
(Paid salaries)

1,500

27,000

1,800

1,500

12

No entry—Not a transaction.

13

Prepaid Insurance .................................
Cash ...............................................
(Paid for one-year
insurance policy)

1,650

Owner’s Drawings .................................
Cash ...............................................
(Withdrew cash for personal
use)

1,000

Cash .......................................................
Service Revenue............................
(Received cash for services
performed)

6,800

17

20

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J1
Credit

1,650

1,000

6,800

Weygandt, Accounting Principles, 12/e, Problems: Set B Solutions (For Instructor Use Only)

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PROBLEM 2-1B (Continued)
Date

Account Titles and Explanation

Apr. 25

Cash ......................................................
Unearned Service Revenue .............
(Received cash for future
services)

2,500

Cash ......................................................
Service Revenue............................
(Received cash for services
performed)

8,900

Accounts Payable.................................
Cash ...............................................
(Paid creditor on account)

900

30

30

Ref.

Debit

Credit
2,500

8,900

900

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PROBLEM 2-2B

(a)
Date

Account Titles and Explanation

Ref.

Debit

May 1

Cash .......................................................
Owner’s Capital .............................
(Owner’s investment of cash
in business)

101
301

20,000
20,000

2

No entry—not a transaction.

3

Supplies .................................................
Accounts Payable .........................
(Purchased supplies on
account)

126
201

2,500

Rent Expense ........................................
Cash ...............................................
(Paid office rent)

729
101

900

Accounts Receivable ............................
Service Revenue............................
(Billed client for services
performed)

112
400

3,200

Cash .......................................................
Unearned Service Revenue ..........
(Received cash for future
services)

101
209

3,500

Cash .......................................................
Service Revenue............................
(Received cash for services
performed)

101
400

1,200

Salaries and Wages Expense ...............
Cash ...............................................
(Paid salaries)

726
101

2,000

7

11

12

17

31

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J1
Credit

2,500

900

3,200

3,500

1,200

2,000

Weygandt, Accounting Principles, 12/e, Problems: Set B Solutions (For Instructor Use Only)

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PROBLEM 2-2B (Continued)
Date

Account Titles and Explanation

Ref.

May 31

Accounts Payable ($2,500 X 60%) ..........
Cash ..............................................
(Paid creditor on account)

201
101

Debit

Credit

1,500
1,500

(b)
Cash
Date
May 1
7
12
17
31
31

Explanation

Accounts Receivable
Date
Explanation
May 11
Supplies
Date
Explanation
May 3
Accounts Payable
Date
Explanation
May 3
31
Unearned Service Revenue
Date
Explanation
May 12

Ref.
J1
J1
J1
J1
J1
J1

Ref.
J1

Ref.
J1

Ref.
J1
J1

Ref.
J1

Debit
20,000

Credit
900

3,500
1,200
2,000
1,500

Debit
3,200

Debit
2,500

Debit

Credit

No. 112
Balance
3,200

Credit

No. 126
Balance
2,500

Credit
2,500

No. 201
Balance
2,500
1,000

1,500

Debit

No. 101
Balance
20,000
19,100
22,600
23,800
21,800
20,300

Credit
3,500

No. 209
Balance
3,500

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PROBLEM 2-2B (Continued)
Owner’s Capital
Date
Explanation
May 1

Ref.
J1

Service Revenue
Date
Explanation
May11
17

Ref.
J1
J1

Salaries and Wages Expense
Date
Explanation
May 31
Rent Expense
Date
Explanation
May 7

(c)

Ref.
J1

Ref.
J1

Debit

Debit

Debit
2,000

Debit
900

Credit
20,000

No. 301
Balance
20,000

Credit
3,200
1,200

No. 400
Balance
3,200
4,400

Credit

No. 726
Balance
2,000

Credit

No. 729
Balance
900

IRIS BECK, CPA
Trial Balance
May 31, 2017
Debit
Cash..................................................................... $20,300
Accounts Receivable..........................................
3,200
Supplies ..............................................................
2,500
Accounts Payable...............................................
Unearned Service Revenue................................
Owner’s Capital ..................................................
Service Revenue .................................................
Salaries and Wages Expense ............................
2,000
Rent Expense......................................................
900
$28,900

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Credit

$ 1,000
3,500
20,000
4,400
$28,900

Weygandt, Accounting Principles, 12/e, Problems: Set B Solutions (For Instructor Use Only)

2-5

PROBLEM 2-3B

(a) & (c)
Balance

(4)
6)

Cash
8,000
(1)
(3)
14,000
(5)
6,000
(7)
(8)
3,500

Owner’s Capital
Balance

1,000
2,000
15,000
3,500
3,000

(8)

Balance
(2)

Supplies
13,000
4,200

Balance

Balance

(1)

(3)

Miscellaneous Expense
2,000
2,000

(5)

Salaries and Wages Expense
(7)
3,500
3,500

Equipment
20,000
20,000
Accounts Payable
Balance
(2)
15,000

15,000
15,000

Advertising Expense
1,000
1,000

17,200
Prepaid Rent
3,000
3,000

Owner’s Drawings
3,000
3,000

Service Revenue
(7)

Accounts Receivable
Balance
15,000
(4)
14,000
(7)
9,000
10,000

40,000
40,000

19,000
4,200
8,200

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2-6

PROBLEM 2-3B (Continued)
(b)
Trans.
1.
2.
3.
4.
5.
6.

7.
8.

Account Titles and Explanation

Debit

Advertising Expense..............................
Cash ...............................................

1,000

Supplies ..................................................
Accounts Payable .........................

4,200

Miscellaneous Expense .........................
Cash ...............................................

2,000

Cash ........................................................
Accounts Receivable ....................

14,000

Accounts Payable ..................................
Cash ...............................................

15,000

Cash ........................................................
Accounts Receivable .............................
Service Revenue ...........................

6,000
9,000

Salaries and Wages Expense ................
Cash ...............................................

3,500

Owner’s Drawings ..................................
Cash ...............................................

3,000

Credit
1,000
4,200
2,000
14,000
15,000

15,000
3,500
3,000

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PROBLEM 2-3B (Continued)
(d)

VIAN REPAIR SERVICE
Trial Balance
January 31, 2017
Cash....................................................................
Accounts Receivable.........................................
Supplies..............................................................
Prepaid Rent.......................................................
Equipment ..........................................................
Accounts Payable ..............................................
Owner’s Capital..................................................
Owner’s Drawings..............................................
Service Revenue ................................................
Advertising Expense .........................................
Miscellaneous Expense.....................................
Salaries and Wages Expense............................

Debit
$ 3,500
10,000
17,200
3,000
20,000

Credit

$ 8,200
40,000
3,000
15,000
1,000
2,000
3,500
$63,200

$63,200

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2-8

PROBLEM 2-4B

SEAN DEVINE COMPANY
Trial Balance
May 31, 2014
Cash ($5,850 + $520 – $486) ........................................
Accounts Receivable ($2,570 – $210) .........................
Prepaid Insurance ($700 + $100) .................................
Supplies ($0 + $520) .....................................................
Equipment ($8,000 – $520)...........................................
Accounts Payable ($4,500 – $100 + $520 – $210).......
Unearned Service Revenue .........................................
Owner’s Capital ($11,700 + $1,000) .............................
Owner’s Drawings ($0 + $1,000)..................................
Service Revenue ..........................................................
Salaries and Wages Expense ($4,200 + $200) ............
Advertising Expense ($1,100 + $486)..........................
Utilities Expense ($890 + $100) ...................................

Debit
$ 5,884
2,360
800
520
7,480

Credit

$ 4,710
650
12,700
1,000
6,960
4,400
1,586
990
$25,020

$25,020

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2-9

PROBLEM 2-5B

(a) & (c)
Cash
Date
Apr. 1
2
9
10
12
25
29
30
30

Explanation
Balance

J1
J1
J1
J1
J1
J1
J1
J1

Accounts Receivable
Date
Explanation
Apr. 30
Prepaid Rent
Date
Explanation
Apr. 30
Land
Date
Apr. 1

Ref.

Explanation
Balance

Buildings
Date
Explanation
Apr. 1
Balance

Ref.
J1

Ref.
J1

Ref.

Ref.

Debit

Credit
1,100

2,800
3,000
500
5,200
2,000
85
1,200

Debit
85

Debit
1,200

Debit

Debit

No. 101
Balance
4,000
2,900
5,700
2,700
2,200
7,400
5,400
5,485
4,285

Credit

No. 112
Balance
85

Credit

No. 136
Balance
1,200

Credit

No. 140
Balance
10,000

Credit

No. 145
Balance
8,000

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PROBLEM 2-5B (Continued)
Equipment
Date
Explanation
Apr. 1
Balance
Accounts Payable
Date
Explanation
Apr. 1
Balance
10
20
Mortgage Payable
Date
Explanation
Apr. 1
Balance
10
Owner’s Capital
Date
Explanation
Apr. 1
Balance
Service Revenue
Date
Explanation
Apr. 9
25
Rent Revenue
Date
Explanation
Apr. 30

Ref.

Debit

Ref.

Debit

J1
J1

1,000

Debit

J1

2,000

Ref.
J1
J1

Ref.
J1

Credit

1,000

Ref.

Ref.

Credit

Debit

Debit

Debit

Credit

Credit

No. 157
Balance
6,000
No. 201
Balance
2,000
1,000
2,000
No. 275
Balance
8,000
6,000
No. 301
Balance
18,000

Credit
2,800
5,200

No. 400
Balance
2,800
8,000

Credit
170

No. 429
Balance
170

Copyright © 2015 John Wiley & Sons, Inc. Weygandt, Accounting Principles, 12/e, Problems: Set B Solutions (For Instructor Use Only) 2-11

PROBLEM 2-5B (Continued)
Advertising Expense
Date
Explanation
Apr. 12
Salaries and Wages Expense
Date
Explanation
Apr. 29
Rent Expense
Date
Explanation
Apr. 2
20

Ref.
J1

Ref.
J1

Ref.
J1
J1

Debit
500

Debit
2,000

Debit
1,100
1,000

Credit

No. 610
Balance
500

Credit

No. 726
Balance
2,000

Credit

No. 729
Balance
1,100
2,100

(b)
Date
Apr. 2

Account Titles and Explanation
Rent Expense .....................................
Cash...........................................
(Paid film rental)

Ref.
729
101

Debit
1,100

1,100

3

No entry—not a transaction.

9

Cash....................................................
Service Revenue .......................
(Received cash for services
performed)

101
400

2,800

Mortgage Payable ..............................
Accounts Payable..............................
Cash...........................................
(Made payments on
mortgage and accounts
payable)

275
201
101

2,000
1,000

10

J1
Credit

2,800

3,000

Copyright © 2015 John Wiley & Sons, Inc. Weygandt, Accounting Principles, 12/e, Problems: Set B Solutions (For Instructor Use Only)

2-12

PROBLEM 2-5B (Continued)
Date

Account Titles and Explanation

Apr. 11

No entry—not a transaction.

12

20

25

29

30

30

Ref.

Debit

Advertising Expense.............................
Cash ..............................................
(Paid advertising expenses)

610
101

500

Rent Expense ........................................
Accounts Payable ........................
(Rented film on account)

729
201

1,000

Cash .......................................................
Service Revenue...........................
(Received cash for services
performed)

101
400

5,200

Salaries and Wages Expense ...............
Cash ..............................................
(Paid salaries expense)

726
101

2,000

Cash .......................................................
Accounts Receivable ............................
Rent Revenue ...............................
(17% X $1,000)
(Received cash and
balance on account for
rent revenue)

101
112
429

85
85

Prepaid Rent ..........................................
Cash ..............................................
(Paid cash for future film
rentals)

136
101

1,200

Credit

500

1,000

5,200

2,000

170

1,200

Copyright © 2015 John Wiley & Sons, Inc. Weygandt, Accounting Principles, 12/e, Problems: Set B Solutions (For Instructor Use Only) 2-13

PROBLEM 2-5B (Continued)
(d)

CLASSIC THEATER
Trial Balance
April 30, 2017

Cash....................................................................
Accounts Receivable.........................................
Prepaid Rent.......................................................
Land ....................................................................
Buildings ............................................................
Equipment ..........................................................
Accounts Payable ..............................................
Mortgage Payable ..............................................
Owner’s Capital..................................................
Service Revenue ................................................
Rent Revenue.....................................................
Advertising Expense .........................................
Salaries and Wages Expense............................
Rent Expense .....................................................

Debit
$ 4,285
85
1,200
10,000
8,000
6,000

Credit

$ 2,000
6,000
18,000
8,000
170
500
2,000
2,100
$34,170

$34,170

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2-14

Weygandt Accounting Principles, 12e
Chapter Two
Solutions to Challenge Exercises

Challenge Exercise 2-1 – Solution
1.
1

Cash………….. ...........................................................

25,000

Owner’s Capital ..............................................
2

No entry, not a transaction

3

Equipment ..................................................................

6

25,000

2,900

Cash……………………………………………………

700

Accounts Payable ..................................................

2,200

Cash........................................................................
Accounts Receivable ................................................

600
3,000

Service Revenue.............................................

27

Accounts Payable .....................................................

3,600

900

Cash .................................................................
30

Salaries and Wages Expense...................................

900
2,300

Cash .................................................................
31

Cash…. .......................................................................

2,300
1,200

Accounts Receivable .....................................

1,200

2. The October 31 balance of Accounts Payable is $1,300 ($2,200 - $900), and would be reported in the
liabilities section of the balance sheet.
3. The October 31 balance of Accounts Receivable is $1,800 ($3,000 - $1,200), and would be reported in
the assets section of the balance sheet.

Copyright © 2015 John Wiley & Sons, Inc.

Weygandt, Accounting Principles, 12/e, Challenge Exercise Solutions

Page 2-1

Challenge Exercise 2-2 – Solution
(a)
General Journal
Date
Sept.

J1

Account Titles
1

5

11

25

29

30

Ref.

Debit

Credit

Cash….........................................................................

101

20,000

Owner’s Capital...............................................

301

Equipment ..................................................................

157

Cash .................................................................

101

6,000

Accounts Payable...........................................

201

11,000

Cash….........................................................................

101

1,000

Accounts Receivable.................................................

112

2,900

Service Revenue .............................................

400

Accounts Payable ......................................................

201

Cash .................................................................

101

Owner’s Drawings .....................................................

306

Cash .................................................................

101

Cash….........................................................................

101

Accounts Receivable......................................

112

20,000
17,000

3,900
7,000
7,000
600
600
1,500
1,500

(b)
Cash

No. 101

Date
Sept.

Explanation

Ref.

Debit

Credit

1

J1

5

J1

11

J1

25

J1

7,000

8,000

29

J1

600

7,400

30

J1

Copyright © 2015 John Wiley & Sons, Inc.

20,000

Balance
20,000

6,000
1,000

14,000
15,000

1,500

Weygandt, Accounting Principles, 12/e, Challenge Exercise Solutions

8,900

Page 2-2

Accounts Receivable
Date

No. 112

Explanation

Sept.

Ref.

11

J1

30

J1

Debit

Credit

Balance

2,900

2,900
1,500

1,400

Challenge Exercise 2-2 – Solution (Continued)

Equipment
Date

No. 157
Explanation

Sept. 5

Ref.
J1

Debit

Credit

17,000

17,000

Accounts Payable
Date

Explanation

No. 201
Ref.

Sept. 5

J1

25

J1

Debit

Credit
11,000

4,000

Explanation

Ref.

Debit

J1

Credit
20,000

Owner’s Drawings
Explanation

Sept.29

Ref.
J1

Explanation

Sept. 11

Balance
20,000
No. 306

Debit

Credit

Balance

600

600

Service Revenue
Date

11,000

No. 301

Sept. 1

Date

Balance

7,000

Owner’s Capital
Date

Balance

No. 400
Ref.
J1

Debit

Credit

Balance

3,900

3,900

(c) Total assets would be $27,300 ($8,900 + $1.400 + $17,000).
(d) Total liabilities would be $4,000 (just accounts payable).

Copyright © 2015 John Wiley & Sons, Inc.

Weygandt, Accounting Principles, 12/e, Challenge Exercise Solutions

Page 2-3

SOLUTION
Chapter 19 Waterways Continuing Problem

19-1

(b)
Waterways Corporation
Cost of Goods Manufactured Schedule
For the Month of November
Work in process 11/1
Direct materials
Raw materials inventory 11/1

$ 52,900
$ 38,000

Raw material purchases
Total raw materials available for use
Less: Raw materials inventory 11/30
Direct materials used
Direct labor
Manufacturing overhead
Depreciation--factory equipment
Factory supplies used
Factory utilities
Indirect labor
Rent--factory equipment
Repairs--factory equipment

185,400
223,400
52,700
$170,700
22,000
16,800
16,850
10,200
48,000
47,000
4,200

Total factory overhead

143,050

Total manufacturing costs
Total cost of work in process

335,750
388,650

Less: Work in process 11/30
Cost of goods manufactured

42,000
$346,650

19-2

Waterways Corporation
Income Statement
For the Month of November

Sales
Cost of goods sold
Finished goods inventory 11/1

$1,350,000
$ 72,550

Cost of goods manufactured
Cost of goods available for sale

346,650
419,200

Less: Finished goods inventory 11/30

68,300

Cost of goods sold
Gross profit
Operating expenses
Selling expenses
Advertising expenses

350,900
999,100

54,000

Sales commissions
Total selling expenses
Administrative expenses
Depreciation--office equipment
Office supplies expense
Other administrative expenses

40,500
94,500
$

Salaries

2,500
1,400
72,000

325,000

Total administrative expenses

400,900

Total operating expenses
Net income

$

19-3

495,400
503,700

Waterways Corporation
Balance Sheet (partial)
November 30
Current assets
Cash
Accounts receivable
Inventories
Raw materials inventory
Work in process inventory
Finished goods inventory
Prepaid expenses
Total current assets

$260,000
295,000
$52,700
42,000
68,300

163,000
41,250
$759,250

19-4

CHAPTER 2
The Recording Process
ASSIGNMENT CLASSIFICATION TABLE
Brief
Exercises

Questions

1.

Indicate how accounts,
debits, and credits are used
to record business
transactions.

1, 2, 3, 4, 5,
6, 7, 8, 9, 19,
21

1, 2, 5

1

1, 2, 4, 6, 7,
14

2.

Indicate how a journal is
used in the recording
process.

10, 11, 12,
13, 14, 16

3, 4, 6

2

3, 5, 6, 7, 10, 1A, 2A, 3A,
11, 12
5A

3.

Explain how a ledger and
posting help in the recording
process.

15, 17

7, 8

3

8, 9, 12

4.

Prepare a trial balance.

18, 20

9, 10

4

9, 10, 11, 13, 2A, 3A, 4A,
14
5A

Copyright © 2015 John Wiley & Sons, Inc.

Do It!

Weygandt, Accounting Principles, 12/e, Solutions Manual

Exercises

A
Problems

Learning Objectives

1A, 2A, 3A,
5A

2A, 3A, 5A

(For Instructor Use Only)

2-1

ASSIGNMENT CHARACTERISTICS TABLE
Problem
Number

2-2

Description

Difficulty
Level

Time Allotted
(min.)

1A

Journalize a series of transactions.

Simple

20–30

2A

Journalize transactions, post, and prepare a trial balance.

Simple

30–40

3A

Journalize transactions, post, and prepare a trial balance.

Moderate

40–50

4A

Prepare a correct trial balance.

Moderate

30–40

5A

Journalize transactions, post, and prepare a trial balance.

Moderate

40–50

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Weygandt, Accounting Principles, 12/e, Solutions Manual

(For Instructor Use Only)

WEYGANDT ACCOUNTING PRINCIPLES 12E
CHAPTER 2
THE RECORDING PROCESS
Number

LO

BT

Difficulty

Time (min.)

BE1

1

C

Simple

6–8

BE2

1

C

Simple

4–6

BE3

2

AP

Simple

4–6

BE4

2

C

Moderate

4–6

BE5

1

C

Simple

6–8

BE6

2

AP

Simple

4–6

BE7

3

AP

Simple

4–6

BE8

3

AP

Simple

4–6

BE9

4

AP

Simple

4–6

BE10

4

AN

Moderate

6–8

DI1

1

C

Simple

3–5

DI2

2

AP

Simple

3–5

DI3

3

AP

Simple

2–4

DI4

4

AP

Simple

6–8

EX1

1

K

Simple

2–4

EX2

1

C

Simple

10–15

EX3

2

AP

Simple

8–10

EX4

1

C

Simple

6–8

EX5

2

AP

Simple

6–8

EX6

1, 2

AP

Simple

6–8

EX7

1, 2

AP

Simple

8–10

EX8

3

K

Simple

2–4

EX9

3, 4

AP

Simple

10–12

EX10

2, 4

AP

Moderate

10–12

EX11

2, 4

AP

Moderate

12–15

EX12

2, 3

AP

Moderate

12–15

EX13

4

AN

Moderate

6–8

EX14

1, 4

AP

Simple

8–10

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Weygandt, Accounting Principles, 12/e, Solutions Manual

(For Instructor Use Only)

2-3

THE RECORDING PROCESS (Continued)
Number

LO

BT

Difficulty

Time (min.)

P1A

1, 2

AP

Simple

20–30

P2A

1, 2, 3, 4

AP

Simple

30–40

P3A

1, 2, 3, 4

AP

Moderate

40–50

P4A

4

AN

Moderate

30–40

P5A

1, 2, 3, 4

AP

Moderate

40–50

BYP1

1

C

Simple

8–10

BYP2

1, 2

AN

Simple

8–10

BYP3

—

AP

Simple

15–20

BYP4

—

AP, S

Simple

15–20

BYP5

3, 4

AP, S

Moderate

20–30

BYP6

4

AN, E

Moderate

10–15

BYP7

—

E

Moderate

10–15

BYP8

—

E

Moderate

15–20

BYP9

—

E

Moderate

15–20

BYP10

—

E

Moderate

20–30

2-4

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Weygandt, Accounting Principles, 12/e, Solutions Manual

(For Instructor Use Only)

Learning Objective

Knowledge

Comprehension

Application

Analysis

Weygandt, Accounting Principles, 12/e, Solutions Manual

1.

Describe how accounts,
Q2-1
debits, and credits are used to Q2-21
record business transactions. E2-1

Q2-2
Q2-3
Q2-4
Q2-5
Q2-6
Q2-7

2.

Indicate how a journal is used Q2-10
in the recording process.
Q2-12

Q2-11
Q2-13
Q2-14
BE2-4

Q2-16
BE2-3
BE2-6
DI2-2
E2-3

3.

Explain how a ledger and
E2-8
posting help in the recording
process.

Q2-15
Q2-17

BE2-7 E2-9 P2-3A
BE2-8 E2-12 P2-5A
DI2-3 P2-2A

4.

Prepare a trial balance.

Q2-18
Q2-20

BE2-9 E2-10 P2-2A BE2-10
DI2-4 E2-11 P2-3A E2-13
E2-9 E2-14 P2-5A P2-4A

Broadening Your Perspective

Synthesis

Evaluation

Q2-8 DI2-1 E2-6 P2-1A P2-5A
Q2-9 E2-2 E2-7 P2-2A
Q2-19 E2-4 E2-14 P2-3A
BE2-1
BE2-2
BE2-5
E2-5
E2-6
E2-7
E2-10
E2-11

E2-12
P2-1A
P2-2A
P2-3A
P2-5A

Financial Reporting Real-World Focus

Comparative Analysis Communication All About You
Ethics Case
Decision Making Ethics Case
Across the
Considering
Organization P, P, and P
Real-World
Focus

BLOOM’S TAXONOMY TABLE

Copyright © 2015 John Wiley & Sons, Inc.

Correlation Chart between Bloom’s Taxonomy, Learning Objectives and End-of-Chapter Exercises and Problems

(For Instructor Use Only)

2-5

ANSWERS TO QUESTIONS
1.

A T account has the following parts: (a) the title, (b) the left or debit side, and (c) the right or credit side.

2.

Disagree. The terms debit and credit mean left and right respectively.

3.

Heath is incorrect. The double-entry system merely records the dual effect of a transaction on the
accounting equation. A transaction is not recorded twice; it is recorded once, with a dual effect.

4.

Erica is incorrect. A debit balance only means that debit amounts exceed credit amounts in an
account. Conversely, a credit balance only means that credit amounts are greater than debit
amounts in an account. Thus, a debit or credit balance is neither favorable nor unfavorable.

5.

(a) Asset accounts are increased by debits and decreased by credits.
(b) Liability accounts are decreased by debits and increased by credits.
(c) Revenues and owner’s capital are increased by credits and decreased by debits. Expenses
and owner’s drawing are increased by debits and decreased by credits.

6.

(a)
(b)
(c)
(d)
(e)
(f)
(g)

Accounts Receivable—debit balance.
Cash—debit balance.
Owner’s Drawings—debit balance.
Accounts Payable—credit balance.
Service Revenue—credit balance.
Salaries and Wages Expense—debit balance.
Owner’s Capital—credit balance.

7.

(a)
(b)
(c)
(d)
(e)

Accounts Receivable—asset—debit balance.
Accounts Payable—liability—credit balance
Equipment—asset—debit balance.
Owner’s Drawings—owner’s equity—debit balance.
Supplies—asset—debit balance.

8.

(a) Debit Supplies and credit Accounts Payable.
(b) Debit Cash and credit Notes Payable.
(c) Debit Salaries and Wages Expense and credit Cash.

9.

(1)
(2)
(3)
(4)
(5)
(6)

10.

2-6

Cash—both debit and credit entries.
Accounts Receivable—both debit and credit entries.
Owner’s Drawings—debit entries only.
Accounts Payable—both debit and credit entries.
Salaries and Wages Expense—debit entries only.
Service Revenue—credit entries only.

The basic steps in the recording process are:
(1) Analyze each transaction for its effect on the accounts.
(2) Enter the transaction information in a journal.
(3) Transfer the journal information to the appropriate accounts in the ledger.

Copyright © 2015 John Wiley & Sons, Inc.

Weygandt, Accounting Principles, 12/e, Solutions Manual

(For Instructor Use Only)

Questions Chapter 2 (Continued)
11.

The advantages of using the journal in the recording process are:
(1) It discloses in one place the complete effects of a transaction.
(2) It provides a chronological record of all transactions.
(3) It helps to prevent or locate errors because the debit and credit amounts for each entry can
be easily compared.

12.

(a) The debit should be entered first.
(b) The credit should be indented.

13.

When three or more accounts are required in one journal entry, the entry is referred to as a
compound entry. An example of a compound entry is the purchase of equipment, part of which is
paid for with cash and the remainder is on account.

14.

(a) No, debits and credits should not be recorded directly in the ledger.
(b) The advantages of using the journal are:
1. It discloses in one place the complete effects of a transaction.
2. It provides a chronological record of all transactions.
3. It helps to prevent or locate errors because the debit and credit amounts for each entry
can be easily compared.

15.

The advantage of the last step in the posting process is to indicate that the item has been posted.

16.

(a) Cash ............................................................................................
Owner’s Capital...................................................................
(Invested cash in the business)

9,000

(b) Prepaid Insurance........................................................................
Cash ...................................................................................
(Paid one-year insurance policy)

800

(c)

17.

9,000

800

Supplies.......................................................................................
Accounts Payable ...............................................................
(Purchased supplies on account)

2,000

(d) Cash ............................................................................................
Service Revenue .................................................................
(Received cash for services performed)

7,500

2,000

7,500

(a) The entire group of accounts maintained by a company, including all the asset, liability, and
owner’s equity accounts, is referred to collectively as the ledger.
(b) A chart of accounts is a list of accounts and the account numbers that identify their location
in the ledger. The chart of accounts is important, particularly for a company that has a large
number of accounts, because it helps organize the accounts and define the level of detail that
a company desires in its accounting system.

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Weygandt, Accounting Principles, 12/e, Solutions Manual

(For Instructor Use Only)

2-7

Questions Chapter 2 (Continued)
18.

A trial balance is a list of accounts and their balances at a given time. The primary purpose of a
trial balance is to prove (check) that the debits equal the credits after posting. A trial balance also
facilitates the discovery of errors in journalizing and posting. In addition, it is useful in preparing
financial statements.

19.

No, Victor is not correct. The proper sequence is as follows:
(b) Business transaction occurs.
(c) Information entered in the journal.
(a) Debits and credits posted to the ledger.
(e) Trial balance is prepared.
(d) Financial statements are prepared.

20.

(a) The trial balance would balance.
(b) The trial balance would not balance.

21.

The normal balances are Cash debit, Accounts Payable credit, and Interest Expense debit.

2-8

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Weygandt, Accounting Principles, 12/e, Solutions Manual

(For Instructor Use Only)

SOLUTIONS TO BRIEF EXERCISES
BRIEF EXERCISE 2-1

1.
2.
3.
4.
5.
6.

Accounts Payable
Advertising Expense
Service Revenue
Accounts Receivable
Owner’s Capital
Owner’s Drawings

(a)
Debit
Effect
Decrease
Increase
Decrease
Increase
Decrease
Increase

(b)
Credit
Effect
Increase
Decrease
Increase
Decrease
Increase
Decrease

(c)
Normal
Balance
Credit
Debit
Credit
Debit
Credit
Debit

BRIEF EXERCISE 2-2

June 1
2
3
12

Account Debited
Cash
Equipment
Rent Expense
Accounts Receivable

Account Credited
Owner’s Capital
Accounts Payable
Cash
Service Revenue

BRIEF EXERCISE 2-3
June 1
2
3
12

Cash .....................................................................
Owner’s Capital ...........................................

5,000

Equipment ...........................................................
Accounts Payable........................................

2,400

Rent Expense ......................................................
Cash .............................................................

800

Accounts Receivable ..........................................
Service Revenue..........................................

300

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Weygandt, Accounting Principles, 12/e, Solutions Manual

5,000
2,400
800

(For Instructor Use Only)

300

2-9

BRIEF EXERCISE 2-4
The basic steps in the recording process are:
1.

Analyze each transaction. In this step, business documents are examined
to determine the effects of the transaction on the accounts.

2.

Enter each transaction in a journal. This step is called journalizing and
it results in making a chronological record of the transactions.

3.

Transfer journal information to ledger accounts. This step is called
posting. Posting makes it possible to accumulate the effects of
journalized transactions on individual accounts.

BRIEF EXERCISE 2-5
(a)
Aug.

2-10

Effect on Accounting Equation

(b)

Debit-Credit Analysis

1

The asset Cash is increased; the
owner’s equity account
Owner’s Capital is increased.

Debits increase assets:
debit Cash $8,000.
Credits increase owner’s equity:
credit Owner’s Capital $8,000.

4

The asset Prepaid Insurance is
increased; the asset Cash is
decreased.

Debits increase assets:
debit Prepaid Insurance $1,800.
Credits decrease assets:
credit Cash $1,800.

16

The asset Cash is increased; the
revenue Service Revenue is
increased.

Debits increase assets:
debit Cash $3,600.
Credits increase revenues:
credit Service Revenue $3,600.

27

The expense Salaries and Wages
Expense is increased; the asset
Cash is decreased.

Debits increase expenses:
debit Salaries and Wages Expense
$1,000.
Credits decrease assets:
credit Cash $1,000.

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Weygandt, Accounting Principles, 12/e, Solutions Manual

(For Instructor Use Only)

BRIEF EXERCISE 2-6
Aug. 1
4
16
27

Cash......................................................................
Owner’s Capital ............................................

8,000

Prepaid Insurance................................................
Cash ..............................................................

1,800

Cash......................................................................
Service Revenue ..........................................

3,600

Salaries and Wages Expense..............................
Cash ..............................................................

1,000

8,000
1,800
3,600
1,000

BRIEF EXERCISE 2-7
Cash
5/12
2,400
5/15
3,000
Ending Bal. 5,400

5/5

Service Revenue
5/5
4,400
5/15
3,000
Ending Bal. 7,400

Accounts Receivable
4,400 5/12

2,400

Ending Bal. 2,000

BRIEF EXERCISE 2-8
Cash
Date
May 12
15

Explanation

Copyright © 2015 John Wiley & Sons, Inc.

Ref.
J1
J1

Debit
2,400
3,000

Weygandt, Accounting Principles, 12/e, Solutions Manual

Credit

Balance
2,400
5,400

(For Instructor Use Only)

2-11

BRIEF EXERCISE 2-8 (Continued)
Accounts Receivable
Date
Explanation
May 5
12

Ref.
J1
J1

Debit
4,400

Service Revenue
Date
Explanation
May 5
15

Ref.
J1
J1

Debit

Credit
2,400

Balance
4,400
2,000

Credit
4,400
3,000

Balance
4,400
7,400

BRIEF EXERCISE 2-9
AMARO COMPANY
Trial Balance
June 30, 2017
Cash ...........................................................................
Accounts Receivable ................................................
Equipment..................................................................
Accounts Payable......................................................
Owner’s Capital .........................................................
Owner’s Drawings .....................................................
Service Revenue........................................................
Salaries and Wages Expense ...................................
Rent Expense.............................................................

2-12

Copyright © 2015 John Wiley & Sons, Inc.

Debit
$ 5,800
3,000
17,000

Credit

$ 8,100
15,000
1,200
10,000
5,100
1,000
$33,100

Weygandt, Accounting Principles, 12/e, Solutions Manual

$33,100

(For Instructor Use Only)

BRIEF EXERCISE 2-10
CAPPSHAW COMPANY
Trial Balance
December 31, 2017
Cash ............................................................................
Prepaid Insurance ......................................................
Accounts Payable ......................................................
Unearned Service Revenue .......................................
Owner’s Capital ..........................................................
Owner’s Drawings ......................................................
Service Revenue ........................................................
Salaries and Wages Expense ....................................
Rent Expense .............................................................

Debit
$10,800
3,500

Credit
$ 3,000
2,200
9,000

4,500
25,600
18,600
2,400
$39,800

$39,800

SOLUTIONS FOR DO IT! REVIEW EXERCISES
DO IT! 2-1
Tom would likely need the following accounts in which to record the
transactions necessary to ready his photography studio for opening day:
Cash (debit balance)
Supplies (debit balance)
Notes Payable (credit balance)

Equipment (debit balance)
Accounts Payable (credit balance)
Owner’s Capital (credit balance)

DO IT! 2-2
Each transaction that is recorded is entered in the general journal. The
three activities would be recorded as follows:
1.
2.

3.

Cash..............................................................
Owner’s Capital...................................

6,300

Supplies .......................................................
Cash.....................................................
Accounts Payable ...............................

1,100

6,300
400
700

No entry because no transaction has occurred.

Copyright © 2015 John Wiley & Sons, Inc.

Weygandt, Accounting Principles, 12/e, Solutions Manual

(For Instructor Use Only)

2-13

DO IT! 2-3
Cash
4/1 1,600 4/16 700
4/3 3,400 4/20 250
4/30 4,050

DO IT! 2-4
CARLAND COMPANY
Trial Balance
December 31, 2017
Debit
Cash ........................................................................... $ 6,000
Accounts Receivable ................................................
8,000
Supplies .....................................................................
6,000
Equipment..................................................................
80,000
Notes Payable............................................................
Accounts Payable......................................................
Salaries and Wages Payable ....................................
Owner’s Capital .........................................................
Owner’s Drawings .....................................................
8,000
Service Revenue........................................................
Rent Expense.............................................................
4,000
Salaries and Wages Expense ...................................
38,000
$150,000

2-14

Copyright © 2015 John Wiley & Sons, Inc.

Weygandt, Accounting Principles, 12/e, Solutions Manual

Credit

$ 20,000
11,000
3,000
28,000
88,000
$150,000

(For Instructor Use Only)

SOLUTIONS TO EXERCISES
EXERCISE 2-1
1.

False. An account is an accounting record of a specific asset, liability,
or owner’s equity item.

2.

False. An account shows increases and decreases in the item it relates to.

3.

False. Each asset, liability, and owner’s equity item has a separate
account.

4.

False. An account has a left, or debit side, and a right, or credit side.

5.

True.

Copyright © 2015 John Wiley & Sons, Inc.

Weygandt, Accounting Principles, 12/e, Solutions Manual

(For Instructor Use Only)

2-15

Copyright © 2015 John Wiley & Sons, Inc.

Transaction

(a)
Basic
Type

(b)
Specific
Account

Jan. 2

Asset

3

(c)

Account Credited

Weygandt, Accounting Principles, 12/e, Solutions Manual

Effect

(d)
Normal
Balance

(a)
Basic
Type

(b)
Specific
Account

Cash

Increase

Debit

Owner’s
Equity

Asset

Equipment

Increase

Debit

9

Asset

Supplies

Increase

11

Asset

Accounts
Receivable

16

Owner’s
Equity

20

(c)
Effect

(d)
Normal
Balance

Owner’s
Capital

Increase

Credit

Asset

Cash

Decrease

Debit

Debit

Liability

Accounts
Payable

Increase

Credit

Increase

Debit

Owner’s
Equity

Service
Revenue

Increase

Credit

Advertising
Expense

Increase

Debit

Asset

Cash

Decrease

Debit

Asset

Cash

Increase

Debit

Asset

Accounts Decrease
Receivable

Debit

23

Liability

Accounts
Payable

Decrease

Credit

Asset

Cash

Decrease

Debit

28

Owner’s
Equity

Owner’s
Drawings

Increase

Debit

Asset

Cash

Decrease

Debit

EXERCISE 2-2

2-16

Account Debited

(For Instructor Use Only)

EXERCISE 2-3
General Journal
Account Titles and Explanation

Date
Jan. 2
3
9
11
16
20
23
28

Ref.

Debit

Cash ...................................................
Owner’s Capital .........................

10,000

Equipment .........................................
Cash ...........................................

3,000

Supplies.............................................
Accounts Payable .....................

500

Accounts Receivable ........................
Service Revenue........................

2,400

Advertising Expense.........................
Cash ...........................................

350

Cash ...................................................
Accounts Receivable ................

700

Accounts Payable .............................
Cash ...........................................

300

Owner’s Drawings.............................
Cash ...........................................

1,000

J1
Credit
10,000
3,000
500
2,400
350
700
300
1,000

EXERCISE 2-4
Oct. 1

Debits increase assets: debit Cash $15,000.
Credits increase owner’s equity: credit Owner’s Capital $15,000.

2

No transaction.

3

Debits increase assets: debit Equipment $1,900.
Credits increase liabilities: credit Accounts Payable $1,900.

Copyright © 2015 John Wiley & Sons, Inc.

Weygandt, Accounting Principles, 12/e, Solutions Manual

(For Instructor Use Only)

2-17

EXERCISE 2-4 (Continued)
Oct. 6

Debits increase assets: debit Accounts Receivable $3,800.
Credits increase revenues: credit Service Revenue $3,800.

27

Debits decrease liabilities: debit Accounts Payable $1,100.
Credits decrease assets: credit Cash $1,100.

30

Debits increase expenses: debit Salaries and Wages Expense
$2,500.
Credits decrease assets: credit Cash $2,500.

EXERCISE 2-5

Date
Oct. 1

Ref.

Debits
15,000

No entry.

3

Equipment ........................................
Accounts Payable ...................

1,900

Accounts Receivable .......................
Service Revenue......................

3,800

Accounts Payable ............................
Cash .........................................

1,100

Salaries and Wages Expense ..........
Cash .........................................

2,500

27
30

Copyright © 2015 John Wiley & Sons, Inc.

Credit
15,000

2

6

2-18

General Journal
Account Titles and Explanation
Cash ..................................................
Owner’s Capital .......................

1,900
3,800
1,100

Weygandt, Accounting Principles, 12/e, Solutions Manual

2,500

(For Instructor Use Only)

EXERCISE 2-6
(a)

1.
2.
3.

Increase the asset Cash, increase the liability Notes Payable.
Increase the asset Equipment, decrease the asset Cash.
Increase the asset Supplies, increase the liability Accounts Payable.

(b)

1.

Cash .................................................................
Notes Payable ...........................................
Equipment........................................................
Cash ..........................................................
Supplies ...........................................................
Accounts Payable.....................................

2.
3.

5,000
5,000
3,100
3,100
850
850

EXERCISE 2-7
(a)

Assets = Liabilities + Owner’s Equity
1. +
+
(Investment)
2. –
–
(Expense)
3. +
+
(Revenue)
4. –
–
(Drawings)

(b)

1.
2.
3.
4.

Cash .................................................................
Owner’s Capital ........................................
Rent Expense ..................................................
Cash ..........................................................
Accounts Receivable ......................................
Service Revenue.......................................
Owner’s Drawings ...........................................
Cash ..........................................................

4,000
4,000
840
840
5,200
5,200
750
750

EXERCISE 2-8
1.
2.
3.
4.
5.

False. The general ledger contains all the asset, liability, and owner’s
equity accounts.
True.
False. The accounts in the general ledger are arranged in financial
statement order: first the assets, then the liabilities, owner’s capital,
owner’s drawings, revenues, and expenses.
True.
False. The general ledger is not a book of original entry; transactions
are first recorded in the general journal, then in the general ledger.

Copyright © 2015 John Wiley & Sons, Inc.

Weygandt, Accounting Principles, 12/e, Solutions Manual

(For Instructor Use Only)

2-19

EXERCISE 2-9
(a)

Aug. 1
10
31
Bal.

Cash
5,000 Aug. 12
2,600
900
6,200

Accounts Receivable
Aug. 25
1,700 Aug. 31
Bal.
800

Aug. 12
(b)

Equipment
5,000

2,300

900

Notes Payable
Aug. 12

2,700

Owner’s Capital
Aug. 1

5,000

Service Revenue
Aug. 10
25
Bal.

2,600
1,700
4,300

JUNE FELDMAN, INVESTMENT BROKER
Trial Balance
August 31, 2017
Cash........................................................................
Accounts Receivable.............................................
Equipment ..............................................................
Notes Payable ........................................................
Owner’s Capital......................................................
Service Revenue ....................................................

Debit
$ 6,200
800
5,000

$12,000

2-20

Copyright © 2015 John Wiley & Sons, Inc.

Weygandt, Accounting Principles, 12/e, Solutions Manual

Credit

$ 2,700
5,000
4,300
$12,000

(For Instructor Use Only)

EXERCISE 2-10
(a)
Date
Apr. 1

12

15

25

29

30

General Journal
Account Titles and Explanation
Cash ....................................................
Owner’s Capital ..............................
(Owner’s investment of
cash in business)

Ref.

Debit
12,000

12,000

Cash ....................................................
Service Revenue ............................
(Received cash for
services performed)

900

Salaries and Wages Expense ............
Cash ................................................
(Paid salaries to date)

1,300

Accounts Payable...............................
Cash ................................................
(Paid creditors on account)

1,500

Cash ....................................................
Accounts Receivable .....................
(Received cash in payment
of account)

400

Cash ....................................................
Unearned Service Revenue ...........
(Received cash for future
services)

1,000

Copyright © 2015 John Wiley & Sons, Inc.

Weygandt, Accounting Principles, 12/e, Solutions Manual

Credit

900

1,300

1,500

400

1,000

(For Instructor Use Only)

2-21

EXERCISE 2-10 (Continued)
(b)

DAGGETT LANDSCAPING COMPANY
Trial Balance
April 30, 2017
Cash..........................................................................
Accounts Receivable...............................................
Supplies....................................................................
Accounts Payable ....................................................
Unearned Service Revenue .....................................
Owner’s Capital........................................................
Service Revenue ......................................................
Salaries and Wages Expense..................................

Debit
$11,500
2,800
1,800

Credit

$

1,300
$17,400

300
1,000
12,000
4,100

$17,400

EXERCISE 2-11
(a) Oct. 1 Cash .............................................................
Owner’s Capital ....................................
(Owner’s investment of cash in
business)

3,000

10 Cash .............................................................
Service Revenue ..................................
(Received cash for services
performed)

750

10 Cash .............................................................
Notes Payable.......................................
(Obtained loan from bank)

4,000

20 Cash .............................................................
Accounts Receivable ...........................
(Received cash in payment of
account)

500

20 Accounts Receivable ..................................
Service Revenue ..................................
(Billed clients for services
performed)

940

2-22

Copyright © 2015 John Wiley & Sons, Inc.

3,000

750

Weygandt, Accounting Principles, 12/e, Solutions Manual

4,000

500

940

(For Instructor Use Only)

EXERCISE 2-11 (Continued)
(b)

SHUMWAY CO.
Trial Balance
October 31, 2017
Cash.....................................................................
Accounts Receivable..........................................
Supplies ..............................................................
Equipment ...........................................................
Notes Payable .....................................................
Accounts Payable...............................................
Owner’s Capital ..................................................
Owner’s Drawings ..............................................
Service Revenue .................................................
Salaries and Wages Expense ............................
Rent Expense .....................................................

Debit
$ 7,200
1,240
400
2,000

Credit

$ 4,000
500
5,000
300
2,490
500
350
$11,990

$11,990

EXERCISE 2-12
(a)
Date
Sept. 1
5

25
30

General Journal
Account Titles and Explanation
Cash...................................................
Owner’s Capital .........................

Ref.
101
301

Debit
10,000

Equipment .........................................
Cash ...........................................
Accounts Payable .....................

157
101
201

12,000

Accounts Payable .............................
Cash ...........................................

201
101

3,000

Owner’s Drawings.............................
Cash ...........................................

306
101

700

Copyright © 2015 John Wiley & Sons, Inc.

Weygandt, Accounting Principles, 12/e, Solutions Manual

J1
Credit
10,000
4,000
8,000
3,000
700

(For Instructor Use Only)

2-23

EXERCISE 2-12 (Continued)
(b)
Cash
Date
Sept. 1
5
25
30

Explanation

Equipment
Date
Explanation
Sept. 5
Accounts Payable
Date
Explanation
Sept. 5
25

Owner’s Capital
Date
Explanation
Sept. 1
Owner’s Drawings
Date
Explanation
Sept. 30

2-24

Copyright © 2015 John Wiley & Sons, Inc.

Ref.
J1
J1
J1
J1

Ref.
J1

Ref.
J1
J1

Ref.
J1

Ref.
J1

Debit
10,000

Credit
4,000
3,000
700

Debit
12,000

Debit

Credit

No. 157
Balance
12,000

Credit
8,000

No. 201
Balance
8,000
5,000

3,000

Debit

Debit
700

No. 101
Balance
10,000
6,000
3,000
2,300

Credit
10,000

Credit

Weygandt, Accounting Principles, 12/e, Solutions Manual

No. 301
Balance
10,000
No. 306
Balance
700

(For Instructor Use Only)

EXERCISE 2-13
Error
1.
2.
3.
4.
5.
6.

(a)
In Balance
No
Yes
Yes
No
Yes
No

(b)
Difference
$525
—
—
415
—
27

(c)
Larger Column
Debit
—
—
Credit
—
Debit

EXERCISE 2-14
OVERNITE DELIVERY SERVICE
Trial Balance
July 31, 2017
Debit
Cash ($78,821 – Debit total without Cash
$66,340) ...................................................................
Accounts Receivable .................................................
Prepaid Insurance ......................................................
Equipment...................................................................
Notes Payable.............................................................
Accounts Payable ......................................................
Salaries and Wages Payable .....................................
Owner’s Capital ..........................................................
Owner’s Drawings ......................................................
Service Revenue ........................................................
Salaries and Wages Expense ....................................
Maintenance and Repairs Expense...........................
Gasoline Expense ......................................................
Utilities Expense ........................................................

Copyright © 2015 John Wiley & Sons, Inc.

Credit

$12,481
7,642
1,968
49,360
$17,000
8,396
815
42,000
700
10,610
4,428
961
758
523
$78,821

Weygandt, Accounting Principles, 12/e, Solutions Manual

$78,821

(For Instructor Use Only)

2-25

SOLUTIONS TO PROBLEMS
PROBLEM 2-1A

Date
Account Titles and Explanation
Mar. 1 Cash ........................................................
Owner’s Capital ..............................
(Owner’s investment of cash
in business)
3 Land.........................................................
Buildings .................................................
Equipment...............................................
Cash ................................................
(Purchased Rainbow’s Golf Land)

2-26

Ref.

Debit
20,000

20,000

12,000
2,000
1,000
15,000

5 Advertising Expense ..............................
Cash ................................................
(Paid for advertising)

900

6 Prepaid Insurance ..................................
Cash ................................................
(Paid for one-year insurance
policy)

600

10 Equipment...............................................
Accounts Payable ..........................
(Purchased equipment on
account)

1,050

18 Cash ........................................................
Service Revenue ............................
(Received cash for services
performed)

1,100

19 Cash ........................................................
Unearned Service Revenue ...........
(Received cash for coupon
books sold)

1,500

Copyright © 2015 John Wiley & Sons, Inc.

J1
Credit

900

600

1,050

1,100

Weygandt, Accounting Principles, 12/e, Solutions Manual

1,500

(For Instructor Use Only)

PROBLEM 2-1A (Continued)
Date
Mar. 25

30

30

31

Account Titles and Explanation
Owner’s Drawings...............................
Cash .............................................
(Withdrew cash for personal
use)

Ref.

Debit
800

800

Salaries and Wages Expense.............
Cash .............................................
(Paid salaries)

250

Accounts Payable ...............................
Cash .............................................
(Paid creditor on account)

1,050

Cash.....................................................
Service Revenue .........................
(Received cash for services
performed)

2,700

Copyright © 2015 John Wiley & Sons, Inc.

Weygandt, Accounting Principles, 12/e, Solutions Manual

Credit

250

1,050

2,700

(For Instructor Use Only)

2-27

PROBLEM 2-2A
(a)
Date

Account Titles and Explanation

Ref.

Debit

Apr. 1

Cash........................................................
Owner’s Capital .............................
(Owner’s investment of cash
in business)

101
301

20,000

No entry—not a transaction.

2

Rent Expense .........................................
Cash ...............................................
(Paid monthly office rent)

729
101

1,100

Supplies..................................................
Accounts Payable..........................
(Purchased supplies on
account from Dazzle Company)

126
201

4,000

Accounts Receivable.............................
Service Revenue............................
(Billed clients for services
performed)

112
400

5,100

Cash........................................................
Unearned Service Revenue...........
(Received cash for future
service)

101
209

1,000

Cash........................................................
Service Revenue............................
(Received cash for services
performed)

101
400

2,100

Salaries and Wages Expense................
Cash ...............................................
(Paid monthly salary)

726
101

2,800

10

11

20

30

2-28

20,000

1

3

Copyright © 2015 John Wiley & Sons, Inc.

J1
Credit

1,100

4,000

5,100

1,000

2,100

Weygandt, Accounting Principles, 12/e, Solutions Manual

2,800

(For Instructor Use Only)

PROBLEM 2-2A (Continued)
Date

Account Titles and Explanation

Ref.

Debits

Apr. 30

Accounts Payable ..............................
Cash ............................................
(Paid Dazzle Company on
account)

201
101

2,400

Credit
2,400

(b)
Cash
Date
Apr. 1
2
11
20
30
30

Explanation

Ref.
J1
J1
J1
J1
J1
J1

Accounts Receivable
Date
Explanation
Apr. 10

Ref.
J1

Supplies
Date
Explanation
Apr. 3

Ref.
J1

Accounts Payable
Date
Explanation
Apr. 3
30

Ref.
J1
J1

Unearned Service Revenue
Date
Explanation
Apr. 11
Copyright © 2015 John Wiley & Sons, Inc.

Ref.
J1

Debit
20,000

Credit
1,100

1,000
2,100
2,800
2,400

Debit
5,100

Debit
4,000

Debit

Credit

No. 112
Balance
5,100

Credit

No. 126
Balance
4,000

Credit
4,000

No. 201
Balance
4,000
1,600

2,400

Debit

Weygandt, Accounting Principles, 12/e, Solutions Manual

No. 101
Balance
20,000
18,900
19,900
22,000
19,200
16,800

Credit
1,000

No. 209
Balance
1,000

(For Instructor Use Only)

2-29

PROBLEM 2-2A (Continued)
Owner’s Capital
Date
Explanation
Apr. 1

Ref.
J1

Service Revenue
Date
Explanation
Apr. 10
20

Ref.
J1
J1

Salaries and Wages Expense
Date
Explanation
Apr. 30
Rent Expense
Date
Explanation
Apr. 2

(c)

Ref.
J1

Ref.
J1

Debit

Debit

Debit
2,800

Debit
1,100

Credit
5,100
2,100

No. 400
Balance
5,100
7,200

Credit

No. 726
Balance
2,800

Credit

No. 729
Balance
1,100

EMILY VALLEY, DENTIST
Trial Balance
April 30, 2017
Cash....................................................................
Accounts Receivable.........................................
Supplies..............................................................
Accounts Payable ..............................................
Unearned Service Revenue ...............................
Owner’s Capital..................................................
Service Revenue ................................................
Salaries and Wages Expense............................
Rent Expense .....................................................

2-30

Credit
20,000

No. 301
Balance
20,000

Copyright © 2015 John Wiley & Sons, Inc.

Debit
$16,800
5,100
4,000

Credit

$ 1,600
1,000
20,000
7,200
2,800
1,100
$29,800

Weygandt, Accounting Principles, 12/e, Solutions Manual

$29,800

(For Instructor Use Only)

PROBLEM 2-3A
(a)
Trans.
1.

Account Titles and Explanation

Debit

Cash ....................................................
Owner’s Capital .........................

40,000
40,000

2.

No entry—Not a transaction.

3.

Prepaid Rent .......................................
Cash ...........................................

24,000

Equipment ..........................................
Cash ...........................................
Accounts Payable .....................

30,000

Prepaid Insurance ..............................
Cash ...........................................

1,800

Supplies ..............................................
Cash ...........................................

420

Supplies ..............................................
Accounts Payable .....................

1,500

Cash ....................................................
Accounts Receivable .........................
Service Revenue .......................

8,000
12,000

Accounts Payable ..............................
Cash ...........................................

400

Cash ....................................................
Accounts Receivable ................

3,000

Utilities Expense ................................
Accounts Payable .....................

380

4.

5.

6.

7.

8.

9.

10.

11.

Copyright © 2015 John Wiley & Sons, Inc.

Weygandt, Accounting Principles, 12/e, Solutions Manual

Credit

24,000

10,000
20,000

1,800

420

1,500

20,000

400

3,000

380

(For Instructor Use Only)

2-31

PROBLEM 2-3A (Continued)
Trans.
12.

Account Titles and Explanation
Salaries and Wages Expense..........
Cash ..........................................

Debit

Credit

6,100
6,100

(b)
(1)

(8)
(10)

(8)

(6)
(7)

(5)

(3)

2-32

Cash
40,000
(3)
(4)
(5)
(6)
8,000
(9)
3,000
(12)
8,280

(4)
24,000
10,000
1,800
420
400
(9)
6,100

Accounts Receivable
12,000
(10)
3,000
9,000

Prepaid Rent
24,000
24,000

Copyright © 2015 John Wiley & Sons, Inc.

Accounts Payable
(4)
20,000
(7)
1,500
400
(11)
380
21,480

Owner’s Capital
(1)

Service Revenue
(8)

Supplies
420
1,500
1,920
Prepaid Insurance
1,800
1,800

Equipment
30,000
30,000

40,000
40,000

20,000
20,000

Salaries and Wages Expense
(12)
6,100
6,100

(11)

Utilities Expense
380
380

Weygandt, Accounting Principles, 12/e, Solutions Manual

(For Instructor Use Only)

PROBLEM 2-3A (Continued)
(c)

MAQUOKETA SERVICES
Trial Balance
May 31, 2017
Cash.................................................................
Accounts Receivable......................................
Supplies ..........................................................
Prepaid Insurance...........................................
Prepaid Rent ...................................................
Equipment .......................................................
Accounts Payable...........................................
Owner’s Capital ..............................................
Service Revenue .............................................
Salaries and Wages Expense ........................
Utilities Expense .............................................

Copyright © 2015 John Wiley & Sons, Inc.

Debit
$ 8,280
9,000
1,920
1,800
24,000
30,000

Credit

$21,480
40,000
20,000
6,100
380
$81,480

Weygandt, Accounting Principles, 12/e, Solutions Manual

$81,480

(For Instructor Use Only)

2-33

PROBLEM 2-4A

AVTAR SANDHU CO.
Trial Balance
June 30, 2017
Cash ($3,340 + $270) .................................................
Accounts Receivable ($2,812 – $270) ......................
Supplies ($1,200 – $710) ...........................................
Equipment ($2,600 + $710)........................................
Accounts Payable ($3,666 – $306 – $360)................
Unearned Service Revenue ......................................
Owner’s Capital .........................................................
Owner’s Drawings ($800 + $600) ..............................
Service Revenue ($2,480 + $882)..............................
Salaries and Wages Expense
($3,200 + $700 – $600) ............................................
Utilities Expense........................................................

2-34

Copyright © 2015 John Wiley & Sons, Inc.

Debit
$ 3,610
2,542
490
3,310

Credit

$ 3,000
1,100
8,000
1,400
3,362
3,300
810
$15,462

Weygandt, Accounting Principles, 12/e, Solutions Manual

$15,462

(For Instructor Use Only)

PROBLEM 2-5A
(a) & (c)
Cash
Date
Mar. 1
2
9
10
12
20
20
31
31
31

Explanation
Balance

Accounts Receivable
Date
Explanation
Mar. 31
Land
Date
Mar. 1

Explanation
Balance

Buildings
Date
Explanation
Mar. 1
Balance
Equipment
Date
Explanation
Mar. 1
Balance

Copyright © 2015 John Wiley & Sons, Inc.

Ref.

J1
J1
J1
J1
J1
J1
J1
J1
J1

Ref.
J1

Ref.


Ref.


Ref.


450
9,000

No. 101
Balance
3,000
1,500
5,800
1,700
800
5,800
3,800
700
1,150
10,150

Debit
450

Credit

No. 112
Balance
450

Credit

No. 140
Balance
24,000

Credit

No. 145
Balance
10,000

Credit

No. 157
Balance
10,000

Debit

Credit
1,500

4,300
4,100
900
5,000
2,000
3,100

Debit

Debit

Debit

Weygandt, Accounting Principles, 12/e, Solutions Manual

(For Instructor Use Only)

2-35

PROBLEM 2-5A (Continued)
Accounts Payable
Date
Explanation
Mar. 1
Balance
2
10
Owner’s Capital
Date
Explanation
Mar. 1
Balance
Service Revenue
Date
Explanation
Mar. 9
20
31
Rent Revenue
Date
Explanation
Mar.31
Advertising Expense
Date
Explanation
Mar.12
Salaries and Wages Expense
Date
Explanation
Mar. 31

2-36

Copyright © 2015 John Wiley & Sons, Inc.

Ref.

J1
J1

Ref.


Ref.
J1
J1
J1

Ref.
J1

Ref.
J1

Ref.
J1

Debit

Credit
2,000

4,100

Debit

Debit

Debit

Debit
900

Debit
3,100

Credit

No. 201
Balance
7,000
9,000
4,900
No. 301
Balance
40,000

Credit
4,300
5,000
9,000

No. 400
Balance
4,300
9,300
18,300

Credit
900

No. 429
Balance
900

Credit

No. 610
Balance
900

Credit

No. 726
Balance
3,100

Weygandt, Accounting Principles, 12/e, Solutions Manual

(For Instructor Use Only)

PROBLEM 2-5A (Continued)
Rent Expense
Date
Explanation
Mar. 2
20

Ref.
J1
J1

Debit
3,500
2,000

Credit

No. 729
Balance
3,500
5,500

(b)
J1
Date

Account Titles and Explanation

Ref.

Debit

Mar. 2

Rent Expense .......................................
Accounts Payable .......................
Cash .............................................
(Rented films for cash and
on account)

729
201
101

3,500
2,000
1,500

3

No entry.

9

Cash ......................................................
Service Revenue..........................
(Received cash for services
performed)

101
400

4,300

Accounts Payable ($2,000 + $2,100) ......
Cash .............................................
(Paid creditors on account)

201
101

4,100

10

4,300

4,100

11

No entry.

12

Advertising Expense............................
Cash .............................................
(Paid advertising expense)

610
101

900

Cash ......................................................
Service Revenue..........................
(Received cash for services
performed)

101
400

5,000

Rent Expense .......................................
Cash .............................................
(Paid film rental)

729
101

2,000

20

20

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Weygandt, Accounting Principles, 12/e, Solutions Manual

Credit

900

5,000

2,000

(For Instructor Use Only)

2-37

PROBLEM 2-5A (Continued)
Date

Account Titles and Explanation

Ref.

Debit

Mar. 31

Salaries and Wages Expense...............
Cash .............................................
(Paid salaries expense)

726
101

3,100

Cash.......................................................
Accounts Receivable............................
Rent Revenue...............................
(15% X $6,000)
(Received cash and balance
on account for rent
revenue)

101
112
429

450
450

Cash.......................................................
Service Revenue..........................
(Received cash for services
performed)

101
400

9,000

31

31

(d)

3,100

900

9,000

STARR THEATER
Trial Balance
March 31, 2017
Cash .................................................................
Accounts Receivable ......................................
Land..................................................................
Buildings..........................................................
Equipment........................................................
Accounts Payable............................................
Owner’s Capital ...............................................
Service Revenue..............................................
Rent Revenue ..................................................
Advertising Expense .......................................
Salaries and Wages Expense .........................
Rent Expense..................................................

2-38

Credit

Copyright © 2015 John Wiley & Sons, Inc.

Debit
$10,150
450
24,000
10,000
10,000

Credit

$ 4,900
40,000
18,300
900
900
3,100
5,500
$64,100

Weygandt, Accounting Principles, 12/e, Solutions Manual

$64,100

(For Instructor Use Only)

CC2

(a)

Nov.

COOKIE CREATIONS

GENERAL JOURNAL
Account Titles and Explanation

Debit

J1
Credit

8 No entry required for cashing U.S.
Savings Bonds—this is a personal
transaction.
8 Cash .........................................................
Owner’s Capital ..................................

500

11 Advertising Expense...............................
Cash.....................................................

65

13 Supplies ...................................................
Cash.....................................................

125

14 Equipment ...............................................
Owner’s Capital ..................................

300

16 Cash .........................................................
Notes Payable .....................................

2,000

17 Equipment ...............................................
Cash.....................................................

900

20 Cash .........................................................
Service Revenue .................................

125

25 Cash .........................................................
Unearned Service Revenue................

30

30 Prepaid Insurance ...................................
Cash.....................................................

1,320

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Weygandt, Accounting Principles, 12/e, Solutions Manual

500
65
125
300
2,000
900
125
30
1,320

(For Instructor Use Only)

2-39

CC2 (Continued)
(b)

Date
Nov.

Cash
Ref.
Debits

Explanation
8
11
13
16
17
20
25
30

Date

J1
J1
J1
J1
J1
J1
J1
J1

Nov. 13

Date

J1

Nov. 30

J1

Explanation

Nov. 14
17

Date

J1
J1

Explanation

2-40

Copyright © 2015 John Wiley & Sons, Inc.

J1

Credits

Balance

900
125
30

125

125

Credits

1,320

Balance
1,320

Credits

300
900

Unearned Service Revenue
Ref.
Debits

Nov. 25

1,320

2,000

Equipment
Ref.
Debits

Balance
500
435
310
2,310
1,410
1,535
1,565
245

65
125

Prepaid Insurance
Ref.
Debits

Explanation

Date

500

Supplies
Ref.
Debits

Explanation

Credits

Balance
300
1,200

Credits

Balance

30

30

Weygandt, Accounting Principles, 12/e, Solutions Manual

(For Instructor Use Only)

CC2 (Continued)
(b) (Continued)

Date

Explanation

Nov. 16

Date
Nov.

8
14

Balance

2,000

2,000

Owner’s Capital
Ref.
Debits

Credits

Balance

500
300

500
800

Credits

Balance

125

125

J1
J1

Explanation

Nov. 20

Date

Credits

J1

Explanation

Date

Notes Payable
Ref.
Debits

Service Revenue
Ref.
Debits
J1

Explanation

Nov. 11

Copyright © 2015 John Wiley & Sons, Inc.

Advertising Expense
Ref.
Debits
J1

Credits

Balance

65

Weygandt, Accounting Principles, 12/e, Solutions Manual

65

(For Instructor Use Only)

2-41

CC2 (Continued)
(c)
COOKIE CREATIONS
Trial Balance
November 30, 2016
Cash ...........................................................................
Supplies .....................................................................
Prepaid Insurance .....................................................
Equipment..................................................................
Unearned Service Revenue ......................................
Notes Payable............................................................
Owner’s Capital .........................................................
Service Revenue........................................................
Advertising Expense .................................................

Debit
$ 245
125
1,320
1,200

Credit

$

65
$2,955

30
2,000
800
125

$2,955

Note to instructors: Because the notes payable is not due for 24 months, it
follows Unearned Service Revenue in the accounts and the trial balance.

2-42

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BYP 2-1

FINANCIAL REPORTING PROBLEM

(a)

(1)
Increase
Side
Credit

(1)
Decrease
Side
Debit

Accounts Receivable

Debit

Credit

Debit

Property, Plant, and Equipment

Debit

Credit

Debit

Cash and Cash Equivalents

Debit

Credit

Debit

Research and Development
Expense

Debit

Credit

Debit

Inventories

Debit

Credit

Debit

Account
Accounts Payable

(2)
Normal
Balance
Credit

(b) 1.
2.
3.

Cash is increased.
Cash is decreased.
Cash is decreased or Accounts Payable is increased.

(c) 1.
2.

Cash is decreased.
Cash is decreased or Notes or Mortgage Payable is increased.

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2-43

BYP 2-2

COMPARATIVE ANALYSIS PROBLEM
PepsiCo

(a)

Coca-Cola

1.

Inventory:

2.

Property, Plant &
Equipment:

debit

Accounts Payable:

credit

3. Cost of Goods
Sold(expense):

debit

Interest Expense:

debit

4. Sales (revenue)

credit

3.

debit

1. Accounts Receivable:

debit

2. Cash and Cash Equivalents: debit

(b)

2-44

1.

Increase in Accounts Receivable: Service Revenue or Sales
Revenue is increased (credited).

2.

Decrease in Salaries and Wages Payable: Cash is decreased
(credited).

3.

Increase in Property, Plant and Equipment: Cash is decreased
(credited) and Accounts Payable or Notes payable is increased
(credited).

4.

Increase in Interest Expense: Cash is decreased (credited).

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Weygandt, Accounting Principles, 12/e, Solutions Manual

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BYP 2-3

COMPARATIVE ANALYSIS PROBLEM
Amazon

(a)

Wal-Mart

1.

Interest Expense:

debit

1. Net Product Revenues:

credit

2.

Cash and Cash
Equivalents:

debit

2. Inventories:

debit

3.

Accounts Payable:

credit

3. Cost of Sales:

debit

(b) The following other accounts are ordinarily involved:
1.

Increase in Accounts Receivable: Service Revenue or Sales
Revenue is increased (credited).

2.

Increase in Interest Expense: Cash is decreased (credited).

3.

Decrease in Salaries and Wages Payable: Cash is decreased
(credited).

4.

Increase in Service Revenue: Cash or Accounts Receivable is
increased (debited).

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2-45

BYP 2-4

REAL-WORLD FOCUS

The answer is dependent upon the company selected by the student.

2-46

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BYP 2-5

REAL-WORLD FOCUS

(a) The reason the Green Bay Packers’ issue an annual report is because
they are a publicly owned, nonprofit company. They issue the report to
the more than 100,000 shareholders who hold shares. None of the
other teams are publicly owned, so they have no obligation to make
their financial information available except to their small group of
owners.
(b) At the time that the article was written the owners of the NFL teams
and the players’ labor union were negotiating a new contract. Knowing
how profitable the NFL teams are would be useful information for the
players to know so that they would have a better sense of how much
the teams could afford to pay. The Packers are obviously a “small
market” team, they are not necessarily representative of teams in
general. However, the Packers’ annual report does give the players
some sense of the profitability of other teams.
(c) Since some of the cost of the stadium that the Packers play in is
covered by taxpayers, the county and state government has an interest
in the team’s finances.
(d) The Packers’ revenues increased during recent years. However,
because the cost of players’ salaries increased at a faster rate than
revenues, the Packers’ operating profit actually declined.

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2-47

BYP 2-6

COMMUNICATION ACTIVITY

Date:

May 25, 2017

To:

Accounting Instructor

From:

Student

In the first transaction, bills totaling $6,000 were sent to customers for
services performed. Therefore, the asset Accounts Receivable is increased
$6,000 and the revenue Service Revenue is increased $6,000. Debits increase
assets and credits increase revenues, so the journal entry is:
Accounts Receivable ............................................................
Service Revenue ............................................................
(Billed customers for services performed)

6,000
6,000

The $6,000 amount is then posted to the debit side of the general ledger
account Accounts Receivable and to the credit side of the general ledger
account Service Revenue.
In the second transaction, $2,000 was paid in salaries to employees. Therefore,
the expense Salaries and Wages Expense is increased $2,000 and the asset
Cash is decreased $2,000. Debits increase expenses and credits decrease
assets, so the journal entry is:
Salaries and Wages Expense ...............................................
Cash................................................................................
(Salaries and wages paid)

2,000
2,000

The $2,000 amount is then posted to the debit side of the general ledger
account Salaries and Wages Expense and to the credit side of the general
ledger account Cash.

2-48

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BYP 2-7

ETHICS CASE

(a) The stakeholders in this situation are:




Ellynn Kole, assistant chief accountant.
Users of the company’s financial statements.
The Doman Company.

(b) By adding $1,000 to the Equipment account, that account total is intentionally misstated. By not locating the error causing the imbalance,
some other account may also be misstated by $1,000. If the amount of
$1,000 is determined to be immaterial, and the intent is not to commit
fraud (cover up an embezzlement or other misappropriation of assets),
Ellynn’s action might not be considered unethical in the preparation of
interim financial statements. However, if Ellynn is violating a company
accounting policy by her action, then she is acting unethically.
(c) Ellynn’s alternatives are:
1. Miss the deadline but find the error causing the imbalance.
2. Tell her supervisor of the imbalance and suffer the consequences.
3. Do as she did and locate the error later, making the adjustment in
the next quarter.

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2-49

BYP 2-8

ETHICS CASE

The decision whether to fire Mr. Edmondson was the responsibility of
Radio Shack’s board of directors, which is elected by the company’s
shareholders to oversee management. The board initially announced its
support for the CEO. After further investigation, the board encouraged
Mr. Edmondson to resign, which he did. In contrast, when Bausch &
Lomb’s CEO offered to resign in a similar situation, the company’s
board refused to accept his resignation. Board members stated that they
felt he was still the best person for the position.
Radio Shack says that although it did a reference check at the time of
Mr. Edmondson’s hiring, it did not check his educational credentials.
Under the Sarbanes-Oxley Act, companies must now perform thorough
background checks as part of a check of internal controls. The bottom
line: Your résumé must be a fair and accurate depiction of your past.

2-50

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BYP 2-9

ALL ABOUT YOU

(a) Students’ responses to this question will vary. It is important that the
steps that they identify be as specific as possible, and clearly directed
toward achieving their goal. You may wish to ask a follow-up question
asking them to explain how each step will assist them in achieving
their goal.
(b) There are many sites on the Internet that provide information about
preparing a résumé. For example, you can find extensive resources at:
http://www.rileyguide.com/resprep.html. Many schools also have resources in their placement centers or writing labs. The Writing Center
at Rensselaer Polytechnic Institute provides useful, concise
information on its website at http://www.ccp.rpi.edu/resources/careersand-graduate-school/resumes. A wide variety of sample résumés can
be found. For example, Monster.com provides samples for a wide
variety of professions and situations at http://www.careeradvice.monster.com/resumes-cover-letters/careers.aspx.
(c)

It is important to provide accurate and complete documentation of all
relevant training, education, and employment experiences so as to
provide assurance to the potential employer, and also to enable that
employer to do follow-up work. If you say you have certain skills, such
as computer skills, try to substantiate the claim with recognized proof
of proficiency. Make sure that all addresses and phone numbers are
accurate and up-to-date. Also, ensure that the people you use as
references have a copy of your résumé and cover letter, and that they
are informed that you are interviewing so they know to expect a call.

(d) See the sample résumés provided in the websites above for various
format options. You might also mention to students that there are
electronic résumé templates available on the Internet.

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2-51

BYP 2-10

CONSIDERING PEOPLE, PLANET AND PROFIT

(a)

The existence of three different forms of certification would most
likely create confusion for coffee purchasers. It would be difficult to
know what aspects of the coffee growing process each certification
covered. Similarly, if there were multiple groups that certified financial
statements, each with different criteria, it would be difficult for
financial statement users to know what each certification promised.

(b)

The Starbucks certification appears to be the most common in that
area. It has the advantage of having a direct link to the Starbucks
coffee market. Although it does not guarantee that Starbucks will buy
its coffee, it is a requirement that must be met before Starbucks will
buy somebody’s coffee. Note that the article states that the Starbucks
certification “incorporates elements of social responsibility and
environmental leadership, but quality of coffee is the first criteria.”
The Smithsonian Bird Friendly is considered to have the strictest
requirements and, as a result, appears to be the least common.

(c)

The certifications have multiple objectives including organic farming
as a means to protect bird species, biodiversity and wildlife habitat.
Some included requirements are to improve workers’ living
conditions, such as providing running water in worker housing, child
labor regulations and education requirements. As mentioned above,
the Starbucks certification has the potential financial benefit of
making Starbucks a potential customer, which can stabilize farmers’
earnings. Certifications can also be financially beneficial because
companies can benefit from the positive public relations effects of
either producing or buying coffee produced using sustainable
practices.

2-52

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IFRS 2-1

INTERNATIONAL FINANCIAL REPORTING PROBLEM

Account

Financial Statement

Other operating
income and
expense
Cash and cash
equivalents
Trade accounts
payable
Cost of net
financial debt

Consolidated Income
Statement
Consolidated Balance
Sheet
Consolidated Balance
Sheet
Consolidated Income
Statement

Copyright © 2015 John Wiley & Sons, Inc.

Position
in
Financial
Statement
After gross profit and
before operating profit
Current assets
Current liabilities
After operating profit and
before profit from
continuing operations
before taxes.

Weygandt, Accounting Principles, 12/e, Solutions Manual

(For Instructor Use Only)

2-53

CC2

(a)

Nov.

COOKIE CREATIONS

GENERAL JOURNAL
Account Titles and Explanation

Debit

J1
Credit

8 No entry required for cashing U.S.
Savings Bonds—this is a personal
transaction.
8 Cash .........................................................
Owner’s Capital ..................................

500

11 Advertising Expense...............................
Cash.....................................................

65

13 Supplies ...................................................
Cash.....................................................

125

14 Equipment ...............................................
Owner’s Capital ..................................

300

16 Cash .........................................................
Notes Payable .....................................

2,000

17 Equipment ...............................................
Cash.....................................................

900

20 Cash .........................................................
Service Revenue .................................

125

25 Cash .........................................................
Unearned Service Revenue................

30

30 Prepaid Insurance ...................................
Cash.....................................................

1,320

Copyright © 2015 John Wiley & Sons, Inc.

500
65
125
300
2,000
900
125
30

Weygandt, Accounting Principles, 12/e, Cookie Creations Solutions

1,320

(For Instructor Use Only)

2-1

CC2 (Continued)
(b)

Date
Nov.

Cash
Ref.
Debits

Explanation
8
11
13
16
17
20
25
30

Date

J1
J1
J1
J1
J1
J1
J1
J1

Nov. 13

Date

J1

Explanation

J1

Explanation

Nov. 14
17

Date

J1
J1

Explanation

2-2 Copyright © 2015 John Wiley & Sons, Inc.

J1

Credits

Balance

900
125
30

125

125

Credits

1,320

Balance
1,320

Credits

300
900

Unearned Service Revenue
Ref.
Debits

Nov. 25

1,320

2,000

Equipment
Ref.
Debits

Balance
500
435
310
2,310
1,410
1,535
1,565
245

65
125

Prepaid Insurance
Ref.
Debits

Nov. 30

Date

500

Supplies
Ref.
Debits

Explanation

Credits

Balance
300
1,200

Credits

Balance

30

30

Weygandt, Accounting Principles, 12/e, Cookie Creations Solutions

(For Instructor Use Only)

Copyright © 2015 John Wiley & Sons, Inc.

Weygandt, Accounting Principles, 12/e, Cookie Creations Solutions

(For Instructor Use Only)

2-3

CC2 (Continued)
(b) (Continued)

Date

Explanation

Nov. 16

Date
Nov.

J1

Explanation
8
14

Date

Owner’s Capital
Ref.
Debits
J1
J1

Explanation

Nov. 20

Date

Notes Payable
Ref.
Debits

Service Revenue
Ref.
Debits
J1

Explanation

Nov. 11

2-4 Copyright © 2015 John Wiley & Sons, Inc.

Advertising Expense
Ref.
Debits
J1

Credits

Balance

2,000

2,000

Credits

Balance

500
300

500
800

Credits

Balance

125

125

Credits

65

Weygandt, Accounting Principles, 12/e, Cookie Creations Solutions

Balance
65

(For Instructor Use Only)

CC2 (Continued)
(c)
COOKIE CREATIONS
Trial Balance
November 30, 2016
Cash ...........................................................................
Supplies .....................................................................
Prepaid Insurance .....................................................
Equipment .................................................................
Unearned Service Revenue ......................................
Notes Payable ...........................................................
Owner’s Capital .........................................................
Service Revenue .......................................................
Advertising Expense.................................................

Debit
$ 245
125
1,320
1,200

Credit

$

65
$2,955

30
2,000
800
125

$2,955

Note to instructors: Because the notes payable is not due for 24 months, it
follows Unearned Service Revenue in the accounts and the trial balance.

Copyright © 2015 John Wiley & Sons, Inc.

Weygandt, Accounting Principles, 12/e, Cookie Creations Solutions

(For Instructor Use Only)

2-5

CHAPTER 2
SOLUTIONS TO EXERCISES—SET B
EXERCISE 2-1B
1.

False. An account is an accounting record of a specific asset, liability,
or owner’s equity item.

2.

True.

3.

False. Each asset, liability, and owner’s equity item has a separate
account.

4.

True.

5.

False. A simple form of an account consisting of the account title, the
left side, and the right side, is called a t-account.

Copyright © 2015 John Wiley & Sons, Inc.

Weygandt, Accounting Principles, 12/e, Exercise B/Problem Set C

(For Instructor Use Only)

2-1

Weygandt, Accounting Principles, 12/e, Exercise B/Problem Set C

Transaction

(a)
Basic
Type

(b)
Specific
Account

Jan. 2

Asset

3

(c)

Account Credited

Effect

(d)
Normal
Balance

(a)
Basic
Type

(b)
Specific
Account

Cash

Increase

Debit

Owner’s
Equity

Owner’s
Equity

Advertising
Expense

Increase

Debit

9

Asset

Equipment

Increase

11

Asset

Accounts
Receivable

16

Asset

20

(c)

(For Instructor Use Only)

Effect

(d)
Normal
Balance

Owner’s
Capital

Increase

Credit

Asset

Cash

Decrease

Debit

Debit

Asset

Cash

Decrease

Debit

Increase

Debit

Owner’s
Equity

Service
Revenue

Increase

Credit

Supplies

Increase

Debit

Liability

Accounts
Payable

Increase

Credit

Asset

Cash

Increase

Debit

Asset

Accounts Decrease
Receivable

Debit

23

Liability

Accounts
Payable

Decrease

Credit

Asset

Cash

Decrease

Debit

28

Owner’s
Equity

Owner’s
Drawings

Increase

Debit

Asset

Cash

Decrease

Debit

EXERCISE 2-2B

Copyright © 2015 John Wiley & Sons, Inc.

Account Debited

2-2

EXERCISE 2-3B
General Journal
Account Titles and Explanation

Date
Jan. 2
3
9
11
16
20
23
28

Ref.

Debit

Cash ...................................................
Owner’s Capital .........................

20,000

Advertising Expense.........................
Cash ...........................................

500

Equipment .........................................
Cash ...........................................

7,000

Accounts Receivable ........................
Service Revenue........................

2,300

Supplies.............................................
Accounts Payable .....................

700

Cash ...................................................
Accounts Receivable ................

1,100

Accounts Payable .............................
Cash ...........................................

400

Owner’s Drawings.............................
Cash ...........................................

1,200

J1
Credit
20,000
500
7,000
2,300
700
1,100
400
1,200

EXERCISE 2-4B
Oct. 1

Debits increase assets: debit Cash $22,000.
Credits increase owner’s equity: credit Owner’s Capital $22,000.

2

Debits increase expenses: debit Rent Expense, $700.
Credits decrease assets: credit Cash $700.

3

Debits increase assets: debit Equipment $2,800.
Credits increase liabilities: credit Accounts Payable $2,800.

Copyright © 2015 John Wiley & Sons, Inc.

Weygandt, Accounting Principles, 12/e, Exercise B/Problem Set C

(For Instructor Use Only)

2-3

EXERCISE 2-4B (Continued)
Oct. 6

Debits increase assets: debit Accounts Receivable $5,400.
Credits increase revenues: credit Service Revenue $5,400.

27

Debits decrease liabilities: debit Accounts Payable $1,100.
Credits decrease assets: credit Cash $1,100.

30

Debits increase expenses: debit Utilities Expense $180.
Credits increase liabilities: credit Accounts Payable $180.

EXERCISE 2-5B
General Journal
Date
Oct. 1
2
3
6
27
30

Account Titles and Explanation
Cash ...................................................
Owner’s Capital ........................

Ref.

Debits
22,000

22,000

Rent Expense ....................................
Cash ..........................................

700

Equipment .........................................
Accounts Payable ....................

2,800

Accounts Receivable ........................
Service Revenue ......................

5,400

Accounts Payable .............................
Cash ..........................................

1,100

Utilities Expense ...............................
Accounts Payable ....................

180

Copyright © 2015 John Wiley & Sons, Inc.

Weygandt, Accounting Principles, 12/e, Exercise B/Problem Set C

Credit

700
2,800
5,400
1,100
180

(For Instructor Use Only)

2-4

EXERCISE 2-6B
(a)

1.
2.
3.

Increase the asset Cash, increase the liability Notes Payable.
Increase the asset Equipment, decrease the asset Cash.
Increase the expense Rent Expense, decrease the asset Cash.

(b)

1.

Cash .................................................................
Notes Payable ...........................................

15,000

Equipment........................................................
Cash ..........................................................

3,100

Rent Expense ..................................................
Cash ..........................................................

900

2.
3.

15,000
3,100
900

EXERCISE 2-7B
(a)

Assets = Liabilities + Owners’ Equity
1. +
+
2. +
+
3. +
+
4. –
–

(b)

1.
2.
3.
4.

Cash .................................................................
Owner’s Capital ........................................

6,000

Supplies ...........................................................
Accounts Payable.....................................

1,100

Accounts Receivable ......................................
Service Revenue.......................................

4,500

Owner’s Drawings ...........................................
Cash ..........................................................

1,200

Copyright © 2015 John Wiley & Sons, Inc.

Weygandt, Accounting Principles, 12/e, Exercise B/Problem Set C

6,000
1,100
4,500
1,200

(For Instructor Use Only)

2-5

EXERCISE 2-8B
1.
2.
3.
4.
5.

False. The general ledger contains all the asset, liability, and owner’s
equity accounts.
False The general ledger is sometimes referred to as the ledger.
False. The accounts in the general ledger are arranged in financial
statement order: first the assets, then the liabilities, owner’s capital,
owner’s drawing, revenues, and expenses.
True.
True.

EXERCISE 2-9B
(a)

Aug. 1
10
31
Bal.

Cash
6,000 Aug. 12
1,700
1,500
8,200

1,000

Accounts Receivable
Aug. 25
2,500 Aug. 31
1,500
Bal.
1,000

Aug. 12
(b)

Equipment
6,000

Notes Payable
Aug. 12

5,000

Owner’s Capital
Aug. 1

6,000

Service Revenue
Aug. 10
25
Bal.

1,700
2,500
4,200

BRET QUANDT, INVESTMENT BROKER
Trial Balance
August 31, 2017
Cash.........................................................................
Accounts Receivable..............................................
Equipment ...............................................................
Notes Payable .........................................................
Owner’s Capital ......................................................
Service Revenue .....................................................

Debit
$ 8,200
1,000
6,000

$15,200
Copyright © 2015 John Wiley & Sons, Inc.

Weygandt, Accounting Principles, 12/e, Exercise B/Problem Set C

Credit

$ 5,000
6,000
4,200
$15,200

(For Instructor Use Only)

2-6

EXERCISE 2-10B
(a)

General Journal

Date
Apr. 1

12

15

25

29

30

Account Titles and Explanation
Cash ....................................................
Owner’s Capital ..............................
(Owner’s investment of
cash in business)

Ref.

Debit
18,000

18,000

Cash ....................................................
Service Revenue ............................
(Received cash for
services provided)

1,200

Salaries and Wages Expense ............
Cash ................................................
(Paid salaries to date)

700

Accounts Payable...............................
Cash ................................................
(Paid creditors on account)

1,600

Cash ....................................................
Accounts Receivable .....................
(Received cash in payment
of account)

900

Cash ....................................................
Unearned Service Revenue ...........
(Received cash for future
services)

1,400

Copyright © 2015 John Wiley & Sons, Inc.

Weygandt, Accounting Principles, 11/e, Exercise B/Problem Set C

Credit

1,200

700

1,600

900

1,400

(For Instructor Use Only)

2-7

EXERCISE 2-10B (Continued)
(b)

CARRIE’S GARDENING COMPANY
Trial Balance
April 30, 2017
Cash..........................................................................
Accounts Receivable...............................................
Supplies ...................................................................
Accounts Payable....................................................
Unearned Service Revenue.....................................
Owner’s Capital .......................................................
Service Revenue ......................................................
Salaries and Wages Expense .................................

Debit
$19,200
2,000
1,900

Credit

$

700
$23,800

300
1,400
18,000
4,100

$23,800

EXERCISE 2-11B
(a) Oct. 1 Cash.............................................................
Owner’s Capital....................................
(Owner’s investment of cash in
business)

8,500

10 Cash.............................................................
Service Revenue ..................................
(Received cash for services
provided)

800

10 Cash.............................................................
Notes Payable ......................................
(Obtained loan from bank)

3,000

20 Cash.............................................................
Accounts Receivable ...........................
(Received cash in payment of
account)

450

20 Accounts Receivable..................................
Service Revenue ..................................
(Billed clients for services
provided)

1,070

Copyright © 2015 John Wiley & Sons, Inc.

Weygandt, Accounting Principles, 12/e, Exercise B/Problem Set C

8,500

800

3,000

450

1,070

(For Instructor Use Only)

2-8

EXERCISE 2-11B (Continued)
(b)

NOLASKO CO.
Trial Balance
October 31, 2017
Cash.....................................................................
Accounts Receivable..........................................
Supplies ..............................................................
Equipment ...........................................................
Notes Payable .....................................................
Accounts Payable...............................................
Owner’s Capital ..................................................
Owner’s Drawings ..............................................
Service Revenue .................................................
Salaries and Wages Expense ............................
Rent Expense .....................................................

Debit
$ 11,800
1,420
400
2,000

Credit

$ 3,000
500
10,500
300
2,670
500
250
$16,670

$16,670

EXERCISE 2-12B
(a)
Date
Sept. 1
5

25
30

General Journal
Account Titles and Explanation
Cash...................................................
Owner’s Capital .........................

Ref.
101
301

Debit
25,000

Equipment .........................................
Cash ...........................................
Accounts Payable .....................

157
101
201

30,000

Accounts Payable .............................
Cash ...........................................

201
101

6,500

Owner’s Drawings.............................
Cash ...........................................

306
101

1,000

Copyright © 2015 John Wiley & Sons, Inc.

Weygandt, Accounting Principles, 11/e, Exercise B/Problem Set C

J1
Credit
25,000
7,500
22,500
6,500
1,000

(For Instructor Use Only)

2-9

EXERCISE 2-12B (Continued)
(b)
Cash
Date
Sept. 1
5
25
30

Explanation

Equipment
Date
Explanation
Sept. 5
Accounts Payable
Date
Explanation
Sept. 5
25

Owner’s Capital
Date
Explanation
Sept. 1
Owner’s Drawings
Date
Explanation
Sept. 30

Copyright © 2015 John Wiley & Sons, Inc.

Ref.
J1
J1
J1
J1

Ref.
J1

Ref.
J1
J1

Ref.
J1

Ref.
J1

Debit
25,000

Credit
7,500
6,500
1,000

Debit
30,000

Debit

Credit

No. 157
Balance
30,000

Credit
22,500

No. 201
Balance
22,500
16,000

6,500

Debit

Debit
1,000

No. 101
Balance
25,000
17,500
11,000
10,000

Credit
25,000

Credit

Weygandt, Accounting Principles, 12/e, Exercise B/Problem Set C

No. 301
Balance
25,000
No. 306
Balance
1,000

(For Instructor Use Only)

2-10

EXERCISE 2-13B
Error
1.
2.
3.
4.
5.
6.

(a)
In Balance
No
Yes
No
No
Yes
No

(b)
Difference
$500
—
400
400
—
45

(c)
Larger Column
Debit
—
Debit
Debit
—
Credit

EXERCISE 2-14B
MORAN DELIVERY SERVICE
Trial Balance
July 31, 2017
Debit
Cash ($54,740 – Debit total without Cash
$40,830) ...................................................................
Accounts Receivable .................................................
Prepaid Insurance ......................................................
Equipment...................................................................
Notes Payable.............................................................
Accounts Payable ......................................................
Salaries and Wages Payable .....................................
Owner’s Capital ..........................................................
Owner’s Drawings ......................................................
Service Revenue ........................................................
Salaries and Wages Expense ....................................
Maintenance and Repairs Expense...........................
Gasoline Expense ......................................................
Insurance Expense.....................................................

Copyright © 2015 John Wiley & Sons, Inc.

Credit

$ 13,910
5,220
1,190
30,000
$16,000
5,110
490
26,780
420
6,360
2,660
580
450
310
$54,740

Weygandt, Accounting Principles, 11/e, Exercise B/Problem Set C

$54,740

(For Instructor Use Only)

2-11

SOLUTIONS TO PROBLEMS—SET C
PROBLEM 2-1C

Date
Mar. 1

3

5

6

10

18

19

Account Titles and Explanation
Cash.........................................................
Owner’s Capital ..............................
(Owner’s investment of cash
in business)

Ref.

Debit
50,000

50,000

Land.........................................................
Buildings .................................................
Equipment ...............................................
Cash ................................................
(Purchased Tee’s Golf Land)

23,000
9,000
6,000

Advertising Expense ..............................
Cash ................................................
(Paid for advertising)

1,600

Prepaid Insurance ..................................
Cash ................................................
(Paid for one-year insurance
policy)

1,480

Equipment ...............................................
Accounts Payable ..........................
(Purchased equipment on
account)

2,600

Cash.........................................................
Service Revenue.............................
(Received cash for services
provided)

800

Cash.........................................................
Unearned Service Revenue ...........
(Received cash for future
services)

1,500

Copyright © 2015 John Wiley & Sons, Inc.

Weygandt, Accounting Principles, 12/e, Exercise B/Problem Set C

J1
Credit

38,000

1,600

1,480

2,600

800

1,500

(For Instructor Use Only)

2-12

PROBLEM 2-1C (Continued)
Date
Mar. 25

30

30

31

Account Titles and Explanation
Owner’s Drawings...............................
Cash .............................................
(Withdrew cash for personal
use)

Ref.

Debit
2,000

2,000

Salaries and Wages Expense.............
Cash .............................................
(Paid salaries)

600

Accounts Payable ...............................
Cash .............................................
(Paid creditor on account)

2,600

Cash.....................................................
Service Revenue .........................
(Received cash for services
provided)

500

Copyright © 2015 John Wiley & Sons, Inc.

Weygandt, Accounting Principles, 11/e, Exercise B/Problem Set C

Credit

600

2,600

500

(For Instructor Use Only)

2-13

PROBLEM 2-2C

(a)
Date

Account Titles and Explanation

Ref.

Debit

Apr. 1

Cash........................................................
Owner’s Capital .............................
(Owner’s investment of cash
in business)

101
301

45,000
45,000

1

No entry—not a transaction.

2

Rent Expense.........................................
Cash ...............................................
(Paid monthly office rent)

729
101

800

Supplies .................................................
Accounts Payable .........................
(Purchased supplies on
account)

126
201

1,500

Accounts Receivable.............................
Service Revenue............................
(Billed clients for services
provided)

112
400

1,800

Cash........................................................
Unearned Service Revenue ..........
(Received cash for future
service)

101
209

500

Cash........................................................
Service Revenue............................
(Received cash for services
provided)

101
400

1,500

Salaries and Wages Expense ...............
Cash ...............................................
(Paid monthly salary)

726
101

2,000

3

10

11

20

30

Copyright © 2015 John Wiley & Sons, Inc.

Weygandt, Accounting Principles, 12/e, Exercise B/Problem Set C

J1
Credit

800

1,500

1,800

500

1,500

2,000

(For Instructor Use Only)

2-14

PROBLEM 2-2C (Continued)
Date

Account Titles and Explanation

Ref.

Debits

Apr. 30

Accounts Payable ..............................
Cash ............................................
(Paid creditor on account)

201
101

600

Credit
600

(b)
Cash
Date
Apr. 1
2
11
20
30
30

Explanation

Ref.
J1
J1
J1
J1
J1
J1

Accounts Receivable
Date
Explanation
Apr. 10

Ref.
J1

Supplies
Date
Explanation
Apr. 3

Ref.
J1

Accounts Payable
Date
Explanation
Apr. 3
30

Ref.
J1
J1

Unearned Service Revenue
Date
Explanation
Apr. 11

Copyright © 2015 John Wiley & Sons, Inc.

Ref.
J1

Debit
35,000

Credit
800

500
1,500
2,000
600

Debit
1,800

Debit
1,500

Debit

Credit

No. 112
Balance
1,800

Credit

No. 126
Balance
1,500

Credit
1,500

No. 201
Balance
1,500
900

600

Debit

No. 101
Balance
45,000
44,200
44,700
46,200
44,200
43,600

Credit
500

Weygandt, Accounting Principles, 11/e, Exercise B/Problem Set C

No. 209
Balance
500

(For Instructor Use Only)

2-15

PROBLEM 2-2C (Continued)
Owner’s Capital
Date
Explanation
Apr. 1

Ref.
J1

Service Revenue
Date
Explanation
Apr. 10
20

Ref.
J1
J1

Salaries and Wages Expense
Date
Explanation
Apr. 30
Rent Expense
Date
Explanation
Apr. 2

(c)

Ref.
J1

Ref.
J1

Debit

Debit

Debit
2,000

Debit
800

Credit
45,000

No. 301
Balance
45,000

Credit
1,800
1,500

No. 400
Balance
1,800
3,300

Credit

No. 726
Balance
2,000

Credit

No. 729
Balance
800

BARBARA FAIR, ARCHITECT
Trial Balance
April 30, 2017
Cash.....................................................................
Accounts Receivable..........................................
Supplies ..............................................................
Accounts Payable...............................................
Unearned Service Revenue................................
Owner’s Capital ..................................................
Service Revenue .................................................
Salaries and Wages Expense ............................
Rent Expense......................................................

Copyright © 2015 John Wiley & Sons, Inc.

Debit
$43,600
1,800
1,500

Credit

$

2,000
800
$49,700

Weygandt, Accounting Principles, 12/e, Exercise B/Problem Set C

900
500
45,000
3,300

$49,700

(For Instructor Use Only)

2-16

PROBLEM 2-3C
(a)
Trans.
1.

Account Titles and Explanation
Cash ....................................................
Owner’s Capital .........................

Debit
100,000

100,000

2.

No entry—Not a transaction.

3.

Prepaid Rent .......................................
Cash ...........................................

36,000

Equipment ..........................................
Cash ...........................................
Accounts Payable .....................

60,000

Prepaid Insurance ..............................
Cash ...........................................

3,000

Supplies ..............................................
Cash ...........................................

1,000

Supplies ..............................................
Accounts Payable .....................

3,000

Cash ....................................................
Accounts Receivable .........................
Service Revenue .......................

10,000
20,000

Accounts Payable ..............................
Cash ...........................................

800

Cash ....................................................
Accounts Receivable ................

5,000

Utilities Expense ................................
Accounts Payable .....................

400

4.

5.
6.
7.
8.

9.
10.
11.

Copyright © 2015 John Wiley & Sons, Inc.

Weygandt, Accounting Principles, 11/e, Exercise B/Problem Set C

Credit

36,000
20,000
40,000
3,000
1,000
3,000

30,000
800
5,000
400

(For Instructor Use Only)

2-17

PROBLEM 2-3C (Continued)
Trans.
12.

Account Titles and Explanation
Salaries and Wages Expense...........
Cash ...........................................

Debit
6,000

Credit
6,000

(b)
(1)

(8)
(10)

(8)

(6)
(7)

(5)

(3)

Cash
100,000
(3)
(4)
(5)
(6)
10,000
(9)
5,000
(12)
48,200

(4)
36,000
20,000
3,000
1,000
800
(9)
6,000

Accounts Receivable
20,000
(10)
5,000
15,000

Accounts Payable
(4)
40,000
(7)
3,000
800
(11)
400
42,600

Owner’s Capital
(1)
100,000
100,000

Service Revenue
(8)

Supplies
1,000
3,000
4,000

Prepaid Insurance
3,000
3,000

Prepaid Rent
36,000
36,000

Copyright © 2015 John Wiley & Sons, Inc.

Equipment
60,000
60,000

30,000
30,000

Salaries and Wages Expense
(12)
6,000
6,000

(11)

Utilities Expense
400
400

Weygandt, Accounting Principles, 12/e, Exercise B/Problem Set C

(For Instructor Use Only)

2-18

PROBLEM 2-3C (Continued)
(c)

HASKETT SERVICES
Trial Balance
May 31, 2017
Cash.................................................................
Accounts Receivable......................................
Supplies ..........................................................
Prepaid Insurance...........................................
Prepaid Rent ...................................................
Equipment .......................................................
Accounts Payable...........................................
Owner’s Capital ..............................................
Service Revenue .............................................
Salaries and Wages Expense ........................
Utilities Expense .............................................

Copyright © 2013 John Wiley & Sons, Inc.

Debit
$ 48,200
15,000
4,000
3,000
36,000
60,000

Credit

$ 42,600
100,000
30,000
6,000
400
$172,600

Weygandt, Accounting Principles, 11/e, Exercise B/Problem Set C

$172,600

(For Instructor Use Only)

2-19

PROBLEM 2-4C

BILL BELLICHEK CO.
Trial Balance
June 30, 2017
Cash ($2,840 + $270) ..................................................
Accounts Receivable ($3,231 – $270) .......................
Supplies ($800 – $340) ...............................................
Equipment ($3,000 + $340) ........................................
Accounts Payable ($2,666 – $206 – $260).................
Unearned Service Revenue .......................................
Owner’s Capital ..........................................................
Owner’s Drawing ($800 + $500).................................
Service Revenue ($2,380 + $801) ..............................
Salaries and Wages Expense
($3,400 + $600 – $500) .............................................
Supplies Expense.......................................................

Copyright © 2015 John Wiley & Sons, Inc.

Debit
$ 3,110
2,961
460
3,340

Credit

$ 2,200
1,200
9,000
1,300
3,181
3,500
910
$15,581

Weygandt, Accounting Principles, 12/e, Exercise B/Problem Set C

$15,581

(For Instructor Use Only)

2-20

PROBLEM 2-5C
(a)&(c)
Cash
Date
Mar. 1
2
9
10
12
20
20
31
31
31

Explanation
Balance

J1
J1
J1
J1
J1
J1
J1
J1
J1

Accounts Receivable
Date
Explanation
Mar. 31
Land
Date
Mar. 1

Ref.

Explanation
Balance

Buildings
Date
Explanation
Mar. 1
Balance
Equipment
Date
Explanation
Mar. 1
Balance

Copyright © 2013 John Wiley & Sons, Inc.

Ref.
J1

Ref.

Ref.

Ref.

400
7,000

No. 101
Balance
16,000
13,000
19,500
12,500
11,700
18,900
15,900
11,100
11,500
18,500

Debit
400

Credit

No. 112
Balance
400

Credit

No. 140
Balance
42,000

Credit

No. 145
Balance
18,000

Credit

No. 157
Balance
16,000

Debit

Credit
3,000

6,500
7,000
800
7,200
3,000
4,800

Debit

Debit

Debit

Weygandt, Accounting Principles, 11/e, Exercise B/Problem Set C

(For Instructor Use Only)

2-21

PROBLEM 2-5C (Continued)
Accounts Payable
Date
Explanation
Mar. 1
Balance
2
10
Owner’s Capital
Date
Explanation
Mar. 1
Balance
Service Revenue
Date
Explanation
Mar. 9
20
31
Rent Revenue
Date
Explanation
Mar.31
Advertising Expense
Date
Explanation
Mar.12
Rent Expense
Date
Explanation
Mar. 2
20

Copyright © 2015 John Wiley & Sons, Inc.

Ref.
J1
J1

Ref.

Ref.
J1
J1
J1

Ref.
J1

Ref.
J1

Ref.
J1
J1

Debit

Credit
3,000

7,000

Debit

Debit

Debit

Debit
800

Debit
6,000
3,000

Credit

No. 201
Balance
12,000
15,000
8,000
No. 301
Balance
80,000

Credit
6,500
7,200
7,000

No. 400
Balance
6,500
13,700
20,700

Credit
800

No. 429
Balance
800

Credit

Credit

Weygandt, Accounting Principles, 12/e, Exercise B/Problem Set C

No. 610
Balance
800
No. 632
Balance
6,000
9,000

(For Instructor Use Only)

2-22

PROBLEM 2-5C (Continued)
Salaries and Wages Expense
Date
Explanation
Mar. 31

Ref.
J1

Debit
4,800

Credit

No. 726
Balance
4,800

(b)
Date

Account Titles and Explanation

Ref.

Debit

Mar. 2

Rent Expense .......................................
Accounts Payable .......................
Cash .............................................
(Rented films for cash and
on account)

632
201
101

6,000
3,000
3,000

3

No entry.

9

Cash ......................................................
Service Revenue..........................
(Received cash for services
provided)

101
400

6,500

Accounts Payable ($3,000 + $4,000) ......
Cash .............................................
(Paid creditors on account)

201
101

7,000

10

6,500

7,000

11

No entry.

12

Advertising Expense............................
Cash .............................................
(Paid advertising expense)

610
101

800

Cash ......................................................
Service Revenue..........................
(Received cash for services
provided)

101
400

7,200

Rent Expense .......................................
Cash .............................................
(Paid film rental)

632
101

3,000

20

20

Copyright © 2013 John Wiley & Sons, Inc.

Weygandt, Accounting Principles, 11/e, Exercise B/Problem Set C

J1
Credit

800

7,200

3,000

(For Instructor Use Only)

2-23

PROBLEM 2-5C (Continued)
Date

Account Titles and Explanation

Ref.

Debit

Mar.31

Salaries and Wages Expense ..............
Cash .............................................
(Paid salaries expense)

726
101

4,800

Cash.......................................................
Accounts Receivable............................
Rent Revenue
(10% X $8,000) ...........................
(Received cash and balance
on account for rent
revenue)

101
112

400
400

Cash.......................................................
Service Revenue..........................
(Received cash for services
provided)

101
400

31

31

(d)

Credit
4,800

429

800

7,000
7,000

JENSEN THEATER
Trial Balance
March 31, 2017
Cash .................................................................
Accounts Receivable ......................................
Land .................................................................
Buildings..........................................................
Equipment........................................................
Accounts Payable ...........................................
Owner’s Capital ...............................................
Service Revenue .............................................
Rent Revenue ..................................................
Advertising Expense.......................................
Rent Expense ..................................................
Salaries and Wages Expense .........................

Copyright © 2015 John Wiley & Sons, Inc.

Debit
$ 18,500
400
42,000
18,000
16,000

Credit

$

800
9,000
4,800
$109,500

Weygandt, Accounting Principles, 12/e, Exercise B/Problem Set C

8,000
80,000
20,700
800

$109,500

(For Instructor Use Only)

2-24



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